By on October 12, 2015

Apple iOS in a Car + Ferrari LaFerrari

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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8 Comments on “Your First Ferrari (Share) Priced As Low As $48...”

  • avatar

    “Marchionne recently said that Ferrari should be considered more as a luxury brand rather than a traditional automaker.”

    “Hey, we sell keychains and cologne and sh!t.”

    Being “lifestyle” is working well for Cadillac so far, certainly. I think owning Ferrari shares is really more of a novelty than anything. After the initial buzz the share value will just fall flat. But Biff Montgomery can go to the country club and talk about the shares he had his broker pick up.

  • avatar

    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.

  • avatar

    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.

    • 0 avatar

      your investment horizon is likely too short to make any real money off Ford.
      A smart play may be to buy in RACE at IPO price (good luck), and hope this alleged market
      illiquidity drives it up a couple bucks, and then dip out while you still can.

      This being said, day trading is a good way to get fleeced for all you’re worth.

    • 0 avatar

      Ferrari != TESLA

      Typical IPOs spike up and then tank. But in that time, money will have been raised for the company owners and the underwriters. You will most likely be left holding the bag.

  • avatar

    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.

    • 0 avatar

      “I believe this is a terrible idea. ”

      Sad to say, I have to agree. Going public will raise money for them, but then there will be poor decisions made in the name of “We have a fiduciary duty to the shareholder.” How I hate that phrase.

      The best way to uphold your duty to the shareholder is to do what’s best for the customer, the product, and your employees.

  • avatar

    Yup drove one of those, except it was a 430 Scuderia. Awesome drive but easy to get into trouble ;)

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