Tuesday 21st September 2010

Could Fiat Float Ferrari Shares?

Marchionne after 90 per cent of Ferrari but won't rule out public offering

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There is a chance that Ferrari shares could be offered to the public by 2014, according to Fiat CEO Sergio Marchionne.

But before you get excited about the possibility of hanging a little piece of Ferrari stock on your wall, it should be worth mentioning that this is not Fiat's preferred aim. What Marchionne and Fiat really want is to return to Fiat its historic 90 per cent stake in the Prancing Horse.

Fiat currently owns 85 per cent of Ferrari; it sold 34 per cent of the company to Italian merchant bank Mediobanca in 2002, but has bought back all but 5 per cent of its original stake, which now belongs to Abu Dhabi investment company Mubadala.

But in new documents detailing the planned separation of Iveco trucks and Case New Holland tractors from Fiat's car business, Fiat revealed that it was now after that 5 per cent of Ferrari owned by Mubadala.

It's easy to understand why the newly slimmed-down Fiat Auto S.p.a. is keen to get hold of as much of Ferrari as possible, too. A recent report by Morgan Stanley valued Ferrari's business - which produces 6000 units a year - at 3.1bn euros (£2.62bn), while Fiat Group Autos was valued at just 3bn euros (£2.5bn) - while shifting 2.15 million units.

But it's that high value that might just tempt Fiat to float Ferrari - it could generate huge amounts of cash that way. Fiat has no official plans however, but Marchionne told reporters that he would not exclude the possibility of offering Ferrari shares to the public saying that "on such a long time frame, I cannot exclude anything".

[pSyCoSiS]

I'll buy (one) share!

[son of clarkson]

pSyCoSiS said:

I'll buy (one) share!

Me two, I mean too (one share)

[drewbagz]

You couldn't go far wrong by owning ferrari shares, no matter the financial climate. The first and foremost name in the sports car industry, a company that if it were ever to have financial difficulties (which i sincerely doubt any time soon), any conglomerate such as VAG or GM would love to add to their portfolio and then watch their share value increase further.

[thinfourth2]

Well you can buy every other kind of branded ferrari tat so why not shares

It would go lovely on some pratts wall next to their ferrari wall clock and they can stare at each morning eaten out of their ferrari bowl wearing their ferrari slippers and bathrobe before getting changed to go to work wearing their ferrari tie and locking their front door with their ferrari key fob before jumping into their vauxhall corsa


And people think ferrari are a car company

[CraigyMc]

drewbagz said:

You couldn't go far wrong by owning ferrari shares, no matter the financial climate. The first and foremost name in the sports car industry, a company that if it were ever to have financial difficulties (which i sincerely doubt any time soon), any conglomerate such as VAG or GM would love to add to their portfolio and then watch their share value increase further.

You must be young. Ferrari made huge losses in the early 1990's and Fiat pumped loads of dosh into the company to keep it going (bear in mind, Fiat had owned at least half of Ferrari since before 1970). At the time it was a really risky investment. Looking back, you'd have to say it was actually quite a good idea but it was still a risk.

Put another way: if you'd bought Ferrari stock in the 1980's you'd have taken a huge loss by about 1992.

C

Edited by CraigyMc on Tuesday 21st September 11:37

[williamp]

I really, really hope Ron Dennis and everyone else in that small Surrey factory buy them

[bennyb24]

"You couldn't go far wrong by owning ferrari shares, no matter the financial climate. The first and foremost name in the sports car industry, a company that if it were ever to have financial difficulties (which i sincerely doubt any time soon), any conglomerate such as VAG or GM would love to add to their portfolio and then watch their share value increase further."


ermmmm probably best to take a look at the pricing first fella ?? they'll probably get done at some crazy multiple reminiscent of alibaba.com at 100 x earnings - that you can go VERY wrong owning.

[The Milfman]

thinfourth2 said:

Well you can buy every other kind of branded ferrari tat so why not shares

It would go lovely on some pratts wall next to their ferrari wall clock and they can stare at each morning eaten out of their ferrari bowl wearing their ferrari slippers and bathrobe before getting changed to go to work wearing their ferrari tie and locking their front door with their ferrari key fob before jumping into their vauxhall corsa


And people think ferrari are a car company

You can get Ferrari slippers?! Where do I sign?!

[CraigyMc]

The Milfman said:

thinfourth2 said:

Well you can buy every other kind of branded ferrari tat so why not shares

It would go lovely on some pratts wall next to their ferrari wall clock and they can stare at each morning eaten out of their ferrari bowl wearing their ferrari slippers and bathrobe before getting changed to go to work wearing their ferrari tie and locking their front door with their ferrari key fob before jumping into their vauxhall corsa


And people think ferrari are a car company

You can get Ferrari slippers?! Where do I sign?!

They don't do slippers (presumably it doesn't get cold enough for Italians to consider warm slippers). They do, on the other hand, do sandals (unsurprising, really) -- http://store.ferrari.com/en/clothing/clothing-acce...

Happy hunting*.

C

• PS. I am, of course, quite aware that you spoke in jest.

[The Milfman]

CraigyMc said:

The Milfman said:

thinfourth2 said:

Well you can buy every other kind of branded ferrari tat so why not shares

It would go lovely on some pratts wall next to their ferrari wall clock and they can stare at each morning eaten out of their ferrari bowl wearing their ferrari slippers and bathrobe before getting changed to go to work wearing their ferrari tie and locking their front door with their ferrari key fob before jumping into their vauxhall corsa


And people think ferrari are a car company

You can get Ferrari slippers?! Where do I sign?!

They don't do slippers (presumably it doesn't get cold enough for Italians to consider warm slippers). They do, on the other hand, do sandals (unsurprising, really) -- http://store.ferrari.com/en/clothing/clothing-acce...

Happy hunting*.

C

• PS. I am, of course, quite aware that you spoke in jest.

Damn it! I was really after a pair of Ferrari slippers!!

[flat6buster]

just finding the numbers interesting if you divide the number of cars produced each year by the value of the firm:

Ferrari worth 436,667 per car; Fiat 1163

I don't know if it means anything but that makes for 2 very very different businesses doesn't it?

[clunk click]

And I wonder what the annual turnover value of Ferrari merchandising is compared to Fiat. Would you own Fiat slippers and dressing gown...
Terry

[Kazlet]

The bonnet still looks like its from a different car.

[ellisd82]

flat6buster said:

just finding the numbers interesting if you divide the number of cars produced each year by the value of the firm:

Ferrari worth 436,667 per car; Fiat 1163

I don't know if it means anything but that makes for 2 very very different businesses doesn't it?

yeah, its the case of the Millionaire who didn't want to have much business in her antiques shop so she just put all the prices really high. In Basic terms, instead of selling lots and working hard say £100 for 100 items sold - she sold 1 item for £100. less work for the money, but fewer sales if any at all. its like selling loads of cheap bic biros or 1 really expensive Paker fountain pen. Supply and demand!

[Charge99]

Hmmm... might lessen the cost of entry to the Ferrari Owners Club!

[geoffracing]

Kazlet said:

The bonnet still looks like its from a different car.

Now THIS is really funny!
From the first time I saw the latest Ferrari (voted by TopGear as the best car ever) I did think there was something wrong with the front design.
Indeed, you are right:
they use the wrong bonnet! Arf arf arf!

It looks quite wrong. The front of my Z4 isn't what's best, but the Ferrari is worse.
And a bit more expensive.

[FEZ550]

CraigyMc said:

drewbagz said:

You couldn't go far wrong by owning ferrari shares, no matter the financial climate. The first and foremost name in the sports car industry, a company that if it were ever to have financial difficulties (which i sincerely doubt any time soon), any conglomerate such as VAG or GM would love to add to their portfolio and then watch their share value increase further.

You must be young. Ferrari made huge losses in the early 1990's and Fiat pumped loads of dosh into the company to keep it going (bear in mind, Fiat had owned at least half of Ferrari since before 1970). At the time it was a really risky investment. Looking back, you'd have to say it was actually quite a good idea but it was still a risk.

Put another way: if you'd bought Ferrari stock in the 1980's you'd have taken a huge loss by about 1992.

C

Edited by CraigyMc on Tuesday 21st September 11:37

This is true but take a look at the crap cars they were building at the time. You couldn't drive very far without having to call someone else to come and get you to bring you home. Been there got the t-shirt. But I've also been lucky enough to own a more modern Ferrari (550). Since the 355/550 started production they are now mostly reliable, apart from a small combustion problem with the 458.......

My point being that Ferrari as a whole is now seen as more reliable super-car production company and therefore their shares are more likely to hold their money than of the era in which you describe.


P.S. I want some slippers too

[Daniel1]

no slippers for me, but wouldnt mind a high-res shot of that 458 for my desktop

[CraigyMc]

FEZ550 said:

My point being that Ferrari as a whole is now seen as more reliable super-car production company and therefore their shares are more likely to hold their money than of the era in which you describe.

Certainly true for the moment, but if they were to float independent of FIAT it's just a matter of waiting for the next downturn and they could easily go the way of the dodo.

Ferrari seem to go through cycles of being in rude health and then subsequent drops in form. It's not like they are the only supercar company kicking about these days either. More choice in their part of the market isn't necessarily good for Ferrari.

C

[jake15919]

The Fiat group must have one of the most confusing brand and model strategies/line-ups in the world, but some how, in a very Italian way, it works.

The mid-term viability of the share issue would depend on what other brands were spun off with Ferrari, and how big a cash war chest Fiat gave away. In the short term there would be enough Ferrari fans to keep the share price up.

I just can't see an independent Ferrari being ran as well as say Porsche, barring the recent VW share scandal, which is just the sort of thing I could see them doing.