Who is in ?

Ferrari sets $1 billion IPO. Ticker symbol? RACE - Oct. 12, 2015

Soon you can buy into ferrari stock.

 

Me

 

Expect even more crap to be labeled Ferrari. In the immortal words of Jim Morrison "This is the End"

Name a luxury goods company which made better stuff after going public.

 

I'm a real estate advisor to hedge funds, but one of my clients who knows I'm a Ferrari nut asked me on a personal basis last week what I thought of the IPO. I responded the following in an email: "Unless I were buying the whole float, I would neither buy nor short. Their brand is strong, but Marchinonne designed a ploy whereby he saddles them up with debt, gives the cash to lesser-profitable FCA divisions, then spins them off to service the debt as an independent stock. Also, the systemic changes they'll have to make as an independent manufacturer to meet fleet emissions regulations scares me (Google Aston Martin emissions requirements). Neither I nor any other Ferrari fans want to see brand whoring on non-automotive merchandise, SUVs and electric hybrids.

Like I said, I'd like to own the entire company and take it back private, but tell me what good has EVER come of taking a highly-successful, wildly-profitable company with an unimprovable brand image public, when they DIDN'T NEED TO RAISE MONEY!!!

Name one company in Ferrari's position where this sort of move improved their product. I can't think of any."

That's my private response to a major investor I deal with, and should NOT be construed as financial or investment advice by anyone. But I would think that an astute investor should consider that FCA is taking a company that has all the capital/credit access it could ever need, LOADING up to the hilt with debt, keeping the cash proceeds, then spinning off Ferrari to pay off all that debt. In real estate, the equivalent would be owning a debt-free house, taking out a huge mortgage on it, then selling it at full market value with the new owner obligated to make your mortgage payments even though you keep the cash. Generally not kosher in my world, but fair game on Wall Street.

Yes, get ready to see institutional investors and activists beating on them to trim F1 budgets, increase production, value engineer parts and source from cheap suppliers, and slap a horse on every consumer product that isn't nailed down, BUT mortgaging Ferrari to fund FCA is the MUCH bigger threat.

 

That's exactly what I was going to say. Seriously though, I haven't seen anyone on this board say this IPO is a good thing.

 

More or less I share what wildcat326 wrote, even if not so much negative as him. In any case, instead of buying Ferrari stocks, why don't you buy a vintage Ferrari? It's better looking than a stock and can be driven, washed, cared, touched, showed: I never saw anyone driving or washing any stock...

ciao

 

At least I like their stock ticker symbol.

Best Regards
Martin

 

Well said sir. This is all about Fiat not Ferrari.

 

When is it going on sale?

This week?

 

There's no exact date available, but it's scheduled for 'mid of October'. So probably by next week.

Best Regards from Germany
Martin

 

If you are a broker, how do you stay on top of it?

Do they keep checking back every 10 min or so for the next week or what?

 

Since this is, how the typical workplace of a broker looks like, I would say yes.

http://images.zeit.de/politik/deutschland/2012-09/boerse-frankfurt/boerse-frankfurt-540x304.jpg

Maybe we get an exact date, but not earlier, than few days before. The last IPO I watched on NYSE, I got the exact date two days earlier.


Best Regards
Martin

 

The exchange will make an announcement in advance. I'm sure you'll see news stories, and Ferraris parked out on Wall Street for maximum PR, at any rate. As you are not an institutional investor, you won't have immediate access to the shares now being floated, but should be able to put in an order with your broker or online trading account (etrade, etc). BTW, doc, if you're doing it just to say you own a share, it can be VERY hard to get a paper certificate issued these days. The best you can maybe expect is a brokerage statement.

 

I thought the F1 team was not part of the IPO deal?

 

Wow. I am not an investment expert, but can appreciate how credible your scenario is. I am sad that it has to work that way.

I was flirting with the idea of buying a single stock just to see if I could get paper for a garage decoration, but given the dirtiness of the scheme, I don't think I want any part of it anymore.

 

I was thinking the same thing .....just wanted a certificate to hang on the wall......oh well

 

ill be looking to short it

 

Because of both economical/environmental reasons, but also "custodial" legal reasons, it's hard to get a paper certificate issued (unless maybe its a tiny microcap stock with relatively few shares).

What that means is, if you log on to your e-trade/Ameritrade/OptionsXpress/etc account and buy a share online, from whom are you buying it? And do they then have to mail you a certificate? And what if you sell if for a dollar higher a few seconds later? How does anyone keep track of where the shares are going? In a digitized automated trading world, it's nearly impossible if someone had to register a paper certificate to the individual owner/trader each time.

If you want to wear your tifosi pride in public and honor enzo's legacy, take the money that a single share would cost, fill up your tank, and treat your car for for a last blast before winter.

 

If they are adhering to the requirements of the quiet period we will not have much direct "official" information on the IPO until just prior to the offering...pricing, shares authorized, etc.

 

Where did you read that?

 

I also did not read that the F1 team was separate; I HAD read that Ferrari and Scuderia Ferrari were going to become separate entities, but I'd be very surprised - especially as they are trading under the symbol "RACE" - if the racing division was held out. Number of shares available and rough pricing has been announced: 17,175,000 shares with a price target of $48-$52/share, amounting to 9% of the company, with another 1% in reserve for insiders and oversubscriptions.

 

Another point I neglected to mention in my analysis is that Marchionne is bifurcating the voting rights, such that the Agnelli clan that controls Fiat will always have control, even after the company is spun out. It just keeps getting better and better.

The only way this IPO be a bigger cluster**** for company culture would be if Ford purchased all the shares (a move that, by the way, would NOT be the dumbest in automotive corporate history).

 

Didn't the Ford family try something similar many years ago?

 

Maybe I'll take my money and buy a 328 to keep my 308 company.

 

One couldn't buy the stock on the open market then. MUCH harder to fend off a takeover when the sharks can gobble up your shares publicly.