Spyker Stocks Soar, But Sergio Isn't Buying

by Cammy Corrigan

Published: January 27th, 2010

spyker stocks soar but sergio isn t buying

Here’s a situation in a hypothetical tense for you. If you were the CEO of a car company which never made a profit in 11 years and you offered to pay $74 million for a car company which hasn’t made a profit since 2001 and had a badly damaged brand, how would you expect your share price to go? Trust me, you’re not even close. MarketWatch.com reports that Spyker shares soared as much as 74% when they announced they had reached an agreement to buy Saab from General Motors. Spyker’s market capitalisation is now €107 million, four times more than when GM first put Saab up for sale.Spyker will need to turn Saab around very quickly. Saab does have €198 million in cash and a €400 million loan from the European Investment Bank and an extra €150 million in other financing. Sounds like a lot, until you realise that Saab lost $340 million in 2008 and is projected to lose a similar amount in 2009. Couple that with the fact that tooling and IP for the current 9-5 and the pre 2003 9-3 has gone to China and all that’s left, that’s fresh, is the new 9-5, this looks like a hefty task in front of Spyker. After digesting all this information, I have only one question. What do the markets see that I don’t to warrant Spyker’s shares going up?Whatever it is, Fiat/Chrysler’s CEO Sergio Marchionne isn’t seeing it either. And for a guy who is trying to turn around America’s most damaged brands, he isn’t shy about sharing his contempt for crazy dreamers and their crazy dreams. He tells Autocar:

I like the Saab brand, [but] I think it’s very difficult to be a niche player and profitable. Marginal players will continue to be marginalized. We cannot build on hopes and dreams.

Unless the American government has been kind enough to underwrite those hopes and dreams, right Sergio?

#Branding #HighFinance #Niche #Saab #SergioMarchionne #Spyker

Cammy Corrigan

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3 of 21 comments

Tparkit on Jan 27, 2010

"What do the markets see that I don’t to warrant Spyker’s shares going up?" Simple. Spyker has now tapped into a flow of US taxpayer money, and probably some from Sweden too. Spyker is being paid to take Saab off the hands of Government Motors. Team Washington will pay a high price indeed to be extricated from their unpopular rescue of Detroit - as long as the exit can be made to look like something other than failure, and the price tag can be hidden.

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- Charly on Jan 28, 2010
  
  Why would Saab get US tax money? There is also the issue that Spyker wasn't particular well known under buyers of expensive cars. Trying to take over Saab solves that.
  
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Fred diesel on Jan 27, 2010

I used to be a relatively happy curmudgeon, working on mostly Saabs for the last thirty years. Now unfortunately, I have to work on virtually everything. Our shop, and Im sure many others survive because of horribly engineered products made by Chrysler, followed closely by Jokeswagon/Audi and the other german wundercars. Sometimes, we really want to see copies of the degrees of the jackasses that sign off on this crap. And Sergio bought Chrysler? Talk about something that needed to be put out of everybodies misery.

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