Ferrari NV (NYSE:RACE) Shares Finish Up On 1st Trading Day, Volume: Strong

Ferrari NV (NYSE:RACE) Shares Finish Up On 1st Trading Day, Volume: Strong

$RACE, $FCAU, $GM, $DIA, $SPY, $QQQ

Ferrari, NV (NYSE:RACE) shares jumped 15% to 60 on its Wall Street debut Wednesday after the Italian supercar maker priced its share offering at 52 the top of the range on heavy investor demand. And defying a choppy US market on which several big IPO’s  have been discounted or delayed this year.

Fiat Chrysler (NYSE:FCAU), aka FCA, which sold shares in Maranello-based Ferrari could raise up to $982-M if the “Green Shoe” option is exercised.

Ferrari shares finished the session at 55.25, + 3.25, or 6.22% on strong volume of 22-M+ shares, the HOD was 60.97/share.

Ferrari CEO Amedeo Felisa and COB Sergio Marchionne were at the New York Stock Exchange to ring the Opening Bell, along with the company founder’s son Piero Ferrari and FCA Chairman John Elkann, whose Agnelli Family will become Ferrari’s top investor on the planned distribution of the rest of FCA’s stake in Ferrari among its own shareholders next year.

Mr. Marchionne, who is also FCA’s CEO sought to position Ferrari as a luxury goods business to win the high-flying trading multiples of companies such as Hermes  and Prada. He did accomplish his goal Wednesday.

Proceeds from the offering will help to fund FCA’s turnaround plan, centered on revamping its Alfa Romeo, Jeep and Maserati brands in an attempt to boost sales to 7-M cars by Y 2018 and compete with premium segment rivals.

The pledge to distribute FCA’s remaining 80% stake in Ferrari among FCA shareholders has helped to lift the group’s shares by more than 80% over the past year and FCA will raise more than $4-B from the offering and subsequent spin-off. The remaining 10% is held by Piero Ferrari, who will keep his stake.

The focus will now turn back to FCA’s operational challenges, including high debt, ambitious sales goals and persistent weakness in its Key Latin American market, only partially offset by a recovering European car market, firmer margins and well-received new models.

Wednesday, CEO Marchionne said there is a great chance that car industry consolidation would happen over the next 2 years to deal with prohibitive costs of building cleaner and more intelligent vehicles.

He did not identify any potential merger partners but said that FCA will work to be part of any such consolidation.

Wednesday, the US major market indexes finished down for a 2nd session running:  DJIA -48.50 at 17168.61, NAS 100 -40.85 at 4840.12, S&P 500 -11.83 at 2018.94

Volume: Trade was about average with 830-M/shares changing hands on the NYSE

• NAS 100 +2.2% YTD
• S&P 500 -1.9% YTD
• DJIA -3.7% YTD
• Russell 2000 -4.9% YTD

Stay tuned…

HeffX-LTN

Paul Ebeling

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