FCA CEO Sergio Marchionne and former Ferrari CEO Luca di Montezemolo at the debut of the LaFerrari.
Not enough pennies in the piggybank to spring for the new Ferrari F12tdf? Not to worry, you can still own a Ferrari – or at least a piece of the Italian automaker.
Fiat Chrysler Automobiles says it expects to wrap-up the spin-off of its high-profile subsidiary sometime between December 31 and January 3rd, a process that began with the recent IPO of Ferrari shares on the New York Stock Exchange in October.
To complete the process, Ferrari shares are expected to go on sale on Milan’s Borsa Italiana on January 4th. How Italian investors react remains to be seen, but after a high-flying start on the NYSE, shares of the supercar company have dipped by around 10%.
“FCA will deliver a total of 22,243,588 Ferrari common shares in relation to a total of 2.875 billion of mandatory convertible bonds in circulation,” read a statement from the trans-Atlantic automaker.
A new Ferrari stood guard outside the NYSE building in October for the stock's NYSE debut.
That includes the nearly 18.9 million shares, or 9% of Ferrari stock, that was listed on the New York exchange last October. That offering went off at a higher, $52 price than many had forecast, helping FCA generate $982.4 million in capital.
Ferrari shares quickly surged to $60, some dubbing the stock the hottest IPO of 2015. But since then, Ferrari shares have been drifting downward, and are currently hovering around $47.
(Ferrari stock surged after its initial debut. Click Here for more.)
Based in Modena, Ferrari has shown strong revenue growth this year and shipments during the third quarter were up 19%, helping push net revenues up 62%. But analysts found a few things to fret about, including poor performance in China, weakening sales of engines to other makers, such as Maserati, and a more general sense of buyer’s remorse. Many believe the IPO was simply overpriced.
That could signal a weaker response from investors on the Borsa Italiana as FCA completes the sale of 10% of its holdings in Ferrari.
(Ferrari plans to boost production sharply by 2019. Click Here for the story.)
Ferrari stock has stumbled since its initially strong debut on the New York Stock Exchange.
Fiat Chrysler CEO Sergio Marchionne has said the goal is to distribute another 80% of Ferrari’s shares to its own stockholders starting early in 2016.
The remaining 10% will be held by Piero Ferrari, son of the company’s founder Enzo.
For the time being, at least, Marchionne will remain the chairman of Ferrari, but there has been some pressure on him to find a full-time replacement.
One of the big challenges for the independent Ferrari will be to revitalize its once-dominant Formula One team. It may soon get new competition from within the Fiat Chrysler empire.
“It’s incredible how the brand Alfa Romeo remains in people’s hearts,” said Marchionne this week. “For this reason, we are thinking about its return, competing for us, in the Formula 1.”
Alfa is the prime beneficiary of the Ferrari spin-off, the capital raised helping fund a 5 billion Euro product expansion plan set to kick into high gear with the upcoming launch of the new Alfa Romeo Giulia sedan.
The brand was a strong player in Formula 1 from 1950 to 1985, winning 11 of the 110 races it competed in. It continued to sell engines to other teams for another three years but has been out of the series entirely for nearly three decades.
(Alfa Romeo shows off new Giulia Quadrifoglio at LA Auto Show. For more, Click Here.)