Your First Ferrari (Share) Priced As Low As $48
Fiat Chrysler Automobiles on Monday finally priced its initial price offering for Ferrari at $48 and $52 per share for 10 percent of the luxury carmaker when its stock goes sale, the Detroit News reported. The pricing values Ferrari at roughly $9.8 billion — less than the $12 billion reported last week — and analysts say the interest in the stock, which will trade under the symbol RACE, is roughly 10 times higher than available shares.
The IPO is part of FCA’s long-term strategy to raise cash for investment in its own vehicles in Jeep, Dodge, Fiat, Chrysler and Maserati brands. According to paperwork filed ahead of the IPO, 10 percent of the company will remain with Ferrari scion Piero, 80 percent will be distributed among Fiat family ownership.
FCA CEO Sergio Marchionne has lobbied investors to find value in Ferrari beyond the automaker’s limited production. Although the automaker disclosed that it would increase production of its supercars to 9,000 cars by 2019 — Ferrari makes roughly 7,000 cars now — that limited supply is still a profit liability for investors.
Marchionne recently said that Ferrari should be considered more as a luxury brand rather than a traditional automaker.
In the company’s initial filing with the Securities and Exchange Commission earlier this year, Ferrari stated its performance and return for investors would hinge heavily on its Formula 1 team and licensing deals.
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I believe the $12B figure included the debt that Ferrari will take on. There's other reports on the web stating that, to FCA, the spinoff will mean 4B+ (euros?) return. That's what will be further invested to finance the new models. In other words, it's going right back into the business.
If I have $5000 to spend which would make more sense. Ferrari or Ford. I honestly never liked Ferrari. But after the ridiculous win I got on TESLA, I can't bring myself to not invest in a car IPO.
I believe this is a terrible idea. As soon as you become a publicly traded entity, you now have an obligation to perform for and return capital to your stockholders. I am very interested in getting my hands on some of these valuation models and sell-side coverage initiations. Ferrari can't play by its old "we can pick and choose our customers" rules with thousands of angry shareholders breathing down its neck. Their objective is to maximize shareholder value, period, full stop, so they will either have to start picking up some production numbers or this stock will merely be an amusement at best.
Yup drove one of those, except it was a 430 Scuderia. Awesome drive but easy to get into trouble ;)