$12.4B Valuation in Ferrari IPO | FerrariChat

$12.4B Valuation in Ferrari IPO

Discussion in 'Ferrari Discussion (not model specific)' started by desmomini, Oct 9, 2015.

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  1. desmomini

    desmomini F1 Rookie
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    #1 desmomini, Oct 9, 2015
    (BN) Ferrari Said to Push for $12.4 Billion Valuation in IPO (1)

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    Ferrari Said to Push for $12.4 Billion Valuation in IPO (1)
    2015-10-09 09:06:57.397 GMT


    (Updates with analyst's comment in seventh paragraph.)

    By Tommaso Ebhardt, Manuel Baigorri and Ruth David
    (Bloomberg) -- Ferrari’s coveted status as a maker of cars for the super rich is helping push up its value in an initial public offering to as much as 11 billion euros ($12.4 billion), according to people familiar with the matter.
    Based on talks with possible investors, Ferrari could be valued from just under 10 billion euros to 11 billion euros when owner Fiat Chrysler Automobiles NV sells a 10 percent stake in the division on the New York Stock Exchange, according to the people, who asked not to be identified because the arrangements are private. Fiat shares traded in New York and Milan jumped to an eight-week high.
    An IPO price range will be published in an updated filing as early as Friday, and presentations to possible buyers are slated for next week, said the people. The valuation may change amid market volatility since Volkswagen AG’s diesel-testing scandal emerged last month, they said.
    Fiat Chrysler Chief Executive Officer Sergio Marchionne, who’s also Ferrari’s chairman, has insisted for months that the brand should be valued as a luxury-goods maker, such as clothiers Prada SpA or Hermes International SCA, and not as an auto manufacturer. Those companies trade at over 20 times operating profit, more than twice the average valuation of carmakers.

    Luxury Multiple


    The Stoxx 600 Automobiles & Parts index of European carmakers and suppliers is down about 3 percent since the Sept.
    18 revelation of the Volkswagen emissions-test cheating scandal, recovering partly from a drop of as much as 15 percent late last month.
    Fiat Chrysler gained as much as 2.6 percent and was trading up 2.2 percent at 13.75 euros as of 11:03 a.m. in Milan following a jump of 4.6 percent Thursday in New York. The carmaker has surged more than 25 percent in New York in the last seven sessions since first details on Ferrari’s valuation were reported, and is at the highest price since mid-August.
    “Fiat shares are accelerating following Ferrari’s race to Wall Street,” said Vincenzo Longo, a strategist with IG Group in Milan. “The timing looks right for Ferrari, which waited until the end of the selloff on the market before setting its price range.”
    Ferrari may be valued in a range of 12 to 14 times expected
    2015 earnings before interest, taxes, depreciation and amortization, one of the people said. Ferrari, which will be listed in New York under the ticker FRRI, posted adjusted Ebitda last year of 693 million euros after generating a margin of 25 percent of sales. Profit rose 8.9 percent in the first half of 2015. Representatives for Fiat Chrysler and Ferrari declined to comment.
    “A luxury multiple is justified due to Ferrari’s capital intensity, profit margins at scaled unit production, operating leverage and price inelasticity,” said Adam Wyden, founder of ADW Capital Partners LP, who owns Fiat Chrysler shares.
    Ferrari, which has made a point of restricting sales to preserve its models’ high-end reputation, is set to push the boundaries of its exclusivity with plans to increase production of cars such as the 235,000-euro 488 Spider convertible to 9,000 cars in 2019 from about 7,200 vehicles last year, according to a Sept. 22 filing. The carmaker had previously set its limit at about 7,000 cars a year.
    “Ferrari is a legend” because of the value of the brand and its track record on profitability, said Lapo Elkann who, along with his brother, Fiat Chairman John Elkann, is part of the Agnelli family that controls the auto manufacturer. At Ferrari, “you don’t sell a car, you sell a dream,” he said in an interview in Milan.
    UBS Group AG, Bank of America Corp.’s Merrill Lynch, Banco Santander SA, Mediobanca SpA and JPMorgan Chase & Co. are advising on the IPO.
     
  2. Zaius

    Zaius Formula Junior

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    #2 Zaius, Oct 10, 2015
  3. Renman57

    Renman57 Formula Junior
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    #3 Renman57, Oct 10, 2015
    :(
     
  4. LARRYH

    LARRYH F1 Veteran
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    #4 LARRYH, Oct 10, 2015
    As far as production increase I believe they will introduce a new V6 model (DINO) this helps meet the cafe requirements and does not directly compete with the current line. and if it comes with a gated option I believe it will be a great addition... so may be overall good.....
     
  5. Todd308TR

    Todd308TR F1 World Champ

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    #5 Todd308TR, Oct 10, 2015
    Going from 7 to 9 doesn't end the mystique. People that live in rich areas already complain they see too many Ferraris. The rest of the world doesn't.
     
  6. VIZSLA

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    #6 VIZSLA, Oct 12, 2015
    Its a bid to save Fiat. The rest is just PR B.S.
     
  7. F2003-GA

    F2003-GA F1 World Champ
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    #7 F2003-GA, Oct 13, 2015
  8. Super_Dave

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    #8 Super_Dave, Oct 14, 2015
  9. ginge82

    ginge82 Formula 3

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    #9 ginge82, Oct 14, 2015
    And yet the cardigan and Agnelli's do nothing but state that this move secures the future of Ferrari. 'Looting' is an accurate word indeed.

    I dread to think what will become of the company in the coming years.
     
  10. VIZSLA

    VIZSLA Four Time F1 World Champ
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    #10 VIZSLA, Oct 14, 2015
    People selling Ferrari have been known to be less than candid before.
     
  11. F430 Driver

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    #11 F430 Driver, Oct 15, 2015
    Anyone here on Fchat putting in for allocation of RACE shares? My broker at Merrill said getting even 100 shares will be a tough ticket. I've heard rumblings it could be 10x oversubbed. Seems nuts at the 10-12B valuation.
     
  12. mikelfrance

    mikelfrance Formula Junior

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    #12 mikelfrance, Oct 16, 2015

    Its a bid to save Fiat and Chrysler. The rest is just PR B.S


    Fixed it for you.
     
  13. VIZSLA

    VIZSLA Four Time F1 World Champ
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    #13 VIZSLA, Oct 16, 2015
    Chrysler is just a division of Fiat.
     
  14. Soerenau

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    #14 Soerenau, Oct 17, 2015
    Last edited by a moderator: Sep 7, 2017
    According to Danish Newspaper POLITIKEN's business analyst, UBS' Sergio Ermotti vented some favourable comment 'illegaly' according to stock market regulation,,,

    According to the article, it's 9 % of FERRARI that's beeing offered for sale to the public this time, set at a nominal price to raise(collect) a total of 5,9 bn DKK, indicating a 65 bn DKK total value of the activity.

    The Ermotti remark made in public, has caused an extra filing to the Securities and Exchange Commission, stating that the UBS' manager just meant that the IPO was important to the company. The article states that it remains to be seen , what the SEC reaction will possibly be, if any such.
    Image Unavailable, Please Login
     
  15. mwr4440

    mwr4440 Five Time F1 World Champ
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    #15 mwr4440, Oct 19, 2015
    RACE should start trading tomorrow or Wednesday.
     
  16. boxerman

    boxerman F1 World Champ
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    #16 boxerman, Oct 19, 2015
    Is Fiat really savable? Methinks Alfa is going to have to be a huge hit, the Italian BMW to save them. The Fiat brand is sub par cheap cars, maybe the VW foibles will give them some oxygen, but even with one hand tied behind their back it looks like VW will crush Fiat in most markets.

    Chrysler will do Ok for now as gas is cheap and their anitquated product line of bohemoths sell. But there really is nothing new coming down the pike.
     
  17. jm2

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    #17 jm2, Oct 19, 2015
  18. Quadcammer

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    #18 Quadcammer, Oct 21, 2015
    Last edited by a moderator: Sep 7, 2017
  19. arnaget

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    #19 arnaget, Oct 21, 2015
    the 250 was PK's; based on the registration stickers, I'm assuming the LaFerrari that was there was a privately owned one, correct? any idea whose it was?
     
  20. crinoid

    crinoid F1 Veteran
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    #20 crinoid, Oct 21, 2015
    Jeez I fear for this company.
     
  21. Soerenau

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    #21 Soerenau, Oct 22, 2015
    Lovely pics.
     
  22. Caeruleus11

    Caeruleus11 F1 World Champ
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    #22 Caeruleus11, Oct 22, 2015
    I agree with you and I think the new Maseratis are not very good either. However, there are 4 letters which I think SM is counting on: JEEP.

    As to filing with the SEC for off hand comments, welcome to being a public company...
     
  23. texasmr2

    texasmr2 Two Time F1 World Champ
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    #23 texasmr2, Oct 27, 2015
    Bingo!
     
  24. mwr4440

    mwr4440 Five Time F1 World Champ
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    #24 mwr4440, Oct 27, 2015
    Last edited: Oct 27, 2015
    True.

    But after 9K, then how does the company grow?

    How does the stock value increase?

    Introducing Ferrari Cavallino labeled tampons? (not really joking).


    Ferrari in F1 is merely advertising and the share holders will only care about adding VALUE and winning races doesn't really mean squat. Losing races MIGHT actually damage the brand and value quite a bit. Who want's to use the tampons of LOSERs?

    So exactly where is the increase in value going to come from?



    This might wind up being the best company to sell Covered Calls on in history, until they start losing.

    Then SHORT.
     
  25. ginge82

    ginge82 Formula 3

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    #25 ginge82, Oct 27, 2015
    It will be further interesting to see what shareholders think of a non winning Ferrari team that possibly gets both its Bernie money cut completely by the courts and has their veto power nullified by Bernie and Todt bringing in a far cheaper engine for the teams to use.

    Interesting times in F1 and for Ferrari.
     
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