A year after Fiat Chrysler spun Ferrari off as an independent company, the Italian luxury sports car manufacturer has filed papers with the NYSE to initiate its own IPO.
The shares are offered under the ticker symbol RACE. At top of Ferrari’s projected range of $48-$52 a share, the company would have a market value of $US9.8bn. Ferrari stands to join the “decacorn” club, which includes top companies like Airbnb, Dropbox, Pinterest, and Snapchat.
The Ferrari people didn’t let the fact that the US listing marked has substantially slowed down in 2015, and are banking on the brand’s reputation to allow the company to avoid the volatility that has plagued and hindered similar deals. Contingent upon the demand the deal gets from potential investors, sources are saying it could raise as much as $893 million. October 21st is when the stock is expected to start trading.
So what will an IPO mean for Ferrari? There’s no doubt it will face pressure from shareholders to increase manufacturing and sales. This might be a bitter pill to swallow, considering the company’s sales volume now stands at only 7000 vehicles a year and designed to create a premium scarcity and a desirable waiting list.
The IPO might also mean that the company will look to build cars that might not fit the racetrack but are eventually more profitable. Porsche has made such a move to much success, but known for its exclusivity, many might find it hard to imagen Ferrari come up with an SUV. Nevertheless, shareholders’ wishes will have to be taken under consideration, especially when considering the fact that the IPO launch will enable Fiat Chrysler to source funding for a $54 billion program geared at the enhancement and developments of its Alfa Romeo, Jeep and Maserati brands.
Trade the Markets’ Leading Stocks
Expand Your Knowledge: Learn all About the Hot Stocks to Trade
