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Ferrari floats on the New York Stock Exchange

Fiat sells nine percent stake in Ferrari on the New York Stock Exchange, raising a total of $893m 


Fiat Chrysler Automobiles sold a total of 17.18 million shares in Ferrari on 21 October, releasing a total of $893m (£579.8m) for the company’s new growth plan. Selling this nine per cent stake in Ferrari is a key part of Fiat boss Sergio Marchionne’s plan to invest heavily in Jeep, Maserati and Alfa Romeo.

There was a lot of buzz around Ferrari’s debut on the New York Stock Exchange, with shares listed under the ticker label ‘RACE’ initially being priced at $52 each. As strong demand from investors pushed up the price to $60 early on, shares ended up slightly at $55 each at the end of the day.

Ferrari offers an interesting proposition to the market. As a car maker, Ferrari is really rather small, with annual output currently limited to around 7000 cars, but it offers a lot of bang for its buck with a market value of around $10.4bn.

While this low production volume is key to Ferrari maintaining its exclusive brand image, it also limits the potential for growth in the future, potentially making the company a slow burner for investors. Judging by the enthusiasm on the first day, this didn’t put too many people off the stock.

At the end of all this, Fiat retains 80 per cent ownership of Ferrari, with the remaining 10 percent still owned by the Ferrari family.

For the full story on Ferrari’s stock market floatation, visit evo.co.uk

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