As part of a deleveraging plan to reduce debt in Fiat-Chrysler, Sergio Marchionne hatched a plan some while back to sell off Ferrari. This started to become reality in October when 10% of the company was listed on the New York Stock Exchange raising $893m for FCA. The share price initially soared from $52 to $60 as investors rushed to claim a piece of one of the world’s most famous racing marques.
FCA now plan to invest significantly in their remaining luxury brands, Alfa Romeo and Maserati, where higher margin returns are more achievable than from the FIAT/Chrysler brands. Sergio Marchionne has already stated he believes there should be an early return to motor racing for the Alfa Romeo brand.
The Ferrari selloff moved towards its completion today as a further 57% of the shares were listed on the Milan stock exchange. However, the early price rises in Ferrari’s ticker ‘RACE’ in New York have not only been reversed but seen the share price today fall to around 10% below its October floatation price. The shares were even briefly suspended at one point during this morning’s trading.
The valuation Marchionne placed on Ferrari at $52 a share is believed by a number of analysts to be way too high for a car company because it is at 43 times more than the company’s total profit in 2014.
FCA shares were also down a huge 33% on opening today.
The unlisted shares remaining are owned by the Agnelli family’s company Exor SpA (23%) and by Piero Ferrari, Enzo Ferrari’s son, who also retains a 10% stake. Despite the amalgamated shareholding of these two being only a minority percentage of the total share capital, the voting rights sit squarely with Ferrari and the Agnelli’s — preventing any future hostile takeover of the Ferrari.