Daimler Dumps Tata
Uh-oh. Daimler must be needing money really bad. Reuters has on their wire that Daimler is trying to sell their complete 5.34 percent share in Tata Motors for cheap. They are offering the package at a discount of 4 to 7 percent below the stock’s Monday close, and hope to raise $429 million.
It’s a good time to sell Tata. Their stock has risen 19 percent since Feb 26 when the company posted a consolidated net profit for the second straight quarter as sales from its Jaguar and Land Rover unit recovered.
But you must be in dire straits as a foreign carmaker if you liquidate your investment in one of the hottest players in one of the world’s most promising car markets just to raise some cash.
Car sales in India have surged in recent months and jumped by a third in February to a record as buyers rushed to beat a planned increase in taxes and tighter emission rules that will kick in in April.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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They already ran out of the 2.7 billion euros from the sale to Aabar-Abu Dhabi back in March of 2009? Horrible management to say the least!
Michael Schumacher must have asked for a raise.
I wouldn't give them $429.00 for that thing.
They are not selling the package for cheap. 5-7% discount towards current share price is pretty normal for a package this large. If they tried to dump their stake on the stock market, the share price would tank much more severely... Also, Daimler has net cash of roughly 7bn currently on the books. Yes, a few months ago they raised capital, but that was back when they faced the threat of having to bail out their own financing arm. They really don't need the money at the moment. Bertel, I would have expected a bit more thorough research from you: There are 2 reasons Daimler is selling their stake: 1. Tata used to build trucks for Daimler, Daimler is now building their own production sites in India 2. Tata now owns Jaguar and is thus perceived by Daimler as a competitor. I know this doesn't make for a sensationalist headline, but it's closer to the truth...