The initial public offering (IPO) market has jilted most new stocks in recent weeks, but Fiat Chrysler Automobiles NV is moving forward with its plan to spin off Ferrari at a valuation of about US$9.4 billion, at the midpoint of the marketed range.
Ferrari, which sells six-figure Italian luxury sports cars, on Friday set a price range that is to be use to gauge investor demand for the IPO, which is to be listed on the New York Stock Exchange.
Ferrari NV, as the automaker is known, is to market 17.2 million shares for US$48 to US$52 each, according to an amended filing with the US Securities and Exchange Commission. Ferrari is not to receive any of the proceeds from the US$859 million IPO, at the midpoint of the range; they are to go mostly to Fiat Chrysler.
Fiat Chrysler is to maintain an 80 percent stake after the offering and plans to distribute the rest to Fiat Chrysler’s investors by next year, according to the filing.
Ferrari’s history is rooted in racing. Enzo Ferrari started a team in 1929 called Scuderia Ferrari, but the company did not produce its first car until 1947.
Two decades later, Fiat acquired a 50 percent stake, which increased to 90 percent after Enzo Ferrari died in 1988.
His son, Piero Ferrari, holds the remaining 10 percent, which he retains after the IPO.
Ferrari shipped a mere 7,255 cars last year, a tactic the company uses to cultivate a reputation for exclusivity. Of course, this low-volume strategy also limits revenue and profit growth. For the six months through June, net revenue increased 2.8 percent from the same period last year and net profit rose 10 percent, according to the filing.
One of Ferrari’s crucial sources of marketing is through its Formula One racing team, which has won 224 Grand Prix races and 15 drivers’ world championships since Formula One began in 1950, the filing showed.
Ferrari’s stock is to be listed on the New York Stock Exchange under the symbol RACE.
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