Ferrari shares soar after $9.8 billion IPO

Ferrari’s shares, which are listed under the apt ticker symbol RACE, rose in morning trading. With 17.18 million shares offered, representing about 9 percent of the company, Ferrari’s listing brought in approximately $893 million for FCA. 

Richard Drew/AP
A trading post on the floor of the New York Stock Exchange is ready for Ferrari's IPO, Wednesday, Oct. 21, 2015. The parent company, mass-market carmaker Fiat Chrysler Automobiles, is floating shares under the stock name RACE.

A year after Ferrari parent company Fiat Chrysler Automobiles [NYSE:FCAU] first announced that the storied Italian sports car manufacturer and race team would be spun off and its shares listed on the New York Stock Exchange, the initial public offering is finally complete and the shares ready to start trading.

Ferrari’s shares, which are listed under the apt ticker symbol RACE, start trading later today, with FCA CEO Sergio Marchionne set to ring the opening bell together with founder Enzo Ferrari’s son Piero and FCA chairman and Agnelli heir John Elkann.

Just like Ferrari’s cars, the company’s shares offered via the IPO were oversubscribed. This allowed Ferrari to price its shares at $52 apiece, the top end of an expected price range. With 17.18 million shares offered, representing about 9 percent of the company, Ferrari’s listing brought in approximately $893 million for FCA. It means Ferrari has a market capitalization of about $9.8 billion, and when you include some debts that Ferrari will take on from FCA you’re looking at an enterprise value of approximately $12 billion.

The remaining 91 percent of Ferrari has been passed over to existing FCA shareholders, primarily the Agnelli family-controlled Exor which gets around 25 percent and Piero Ferrari retaining his own 10 percent stake. Such a structure will ensure that control of Ferrari won't change much.

With money raised from spinning off Ferrari, FCA will be able to refinance a multi-billion-dollar investment program that will see numerous new models introduce across the automaker’s brands, primarily Alfa Romeo, Jeep and Maserati. As previously reported, these brands have much greater potential for increased returns to investors than Ferrari.

Follow Motor Authority on Facebook and Twitter.

You've read  of  free articles. Subscribe to continue.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.