Ferrari for sale!

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When Fiat Chrysler chief, Sergio Marchionne, fired just about everyone including Ferrari CEO Luca di Montezemolo and became the head of the Italian sports car manufacturer, there was always the implied intent that the famous Maranello brand would be used to fuel the Fiat Chrysler empire and it seems that now is the time when Ferrari goes on the chopping block.

According to a New York Times article, Ferrari has listed with the New York Stock Exchange for an IPO of approximately 10% of it outstanding shares with Fiat, the parent company of Ferrari since 1969, to retain 80%.

Say what you will about Luca, he was a racer and passionate Ferrari man while Marchionne seems to be a passionate business man who has been long of criticism of the famous company ans short on praise or deference. He’s been critical of the operation and fired most of its key executive management while offering polemics such as a losing Ferrari isn’t a Ferrari. That has played well in the 24-hour news cycle talking points but it offers very little in regards to real Formula 1 long-term strategy.

While firing most of the key personnel has seemed like a results-driven strategy, the reality is that Pat Fry’s car is what we are seeing at work in 2015 and it is with Luca Marmorini’s power unit improvements.

Time will tell as to how Ferrari will fare on the open market but suffice to say, if you’ve ever wanted to own of piece of the Italian car company, now is the time. I’ll be honest, as a Ferrari fan, I’m not jazzed about this IPO and while I had no issues with Fiat gaining from Ferrari’s brand equity, I am concerned about Ferrari’s open-market form as a publicly traded company. That brings in a lot of non-racers and simple car fanatics and opportunists but lets hope the injection of cash pays dividends for the folks in Maranello.

Hat Tip: NYT

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Daria

Firstly, they haven’t listed the shares yet, they have filed for the IPO, yes. The press says they want to finish the process by the early 2016. And it will be next to impossible to actually own the Ferrari shares as a private investor, since the demand is likely to be very high. Being a public company costs a lot of money, even if you think just of the quarterly reporting. And also being a public company encourages short term thinking. Prior to IPO FCA will transfer EUR 2,25bn in cash from Ferrari to FCA, which also doesn’t help. What… Read more »

zke007

I might be wrong but the 10k cars/per number is incorrect. I think Marchionne wanted a bigger number than that.

But everything you state is spot on.

Daria

Well my source for the number is the Investor presentation http://www.fcagroup.com/investorday/PresentationList/Ferrari.pdf but it’s really old, more than a year. And it’s the same event when they said they plan to sell 400k Alfas p.a. by 2018 ;) Oh and they sade Ferrari were not for sale. So it’s a blah blah anyway.

The preliminary prospectus is here by the way http://www.sec.gov/Archives/edgar/data/1648416/000164841615000004/newbusinessnetherlands.htm

runnah

I am just waiting for my re-badged Fiat 500, the Ferrari “Poco Verruca”.

Shocks&Awe

I had to look it up, but that’s funny… :-)

DRS_Matt

I’d like to hear more about how a mediocre racing team with a handful of successful periods over a 50 year span fueled fiat. I assumed it was the 500,the 131 and the panda.

Paul KieferJr

So, I’m wondering if this will be closer to Berkshire Hathaway numbers or go bust.

Derek

I don’t like this because it’ll make Ferrari beholden to the stockholders, and possibly less inclined to make outrageous cars that will make you fly through the pearly gates backwards in a flaming ball of fire. They could let themselves be held back by the shareholders and be led to make more “safe” and “friendly to all” cars.

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