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Public to prosper from Ferrari fortunes

Fiat Chrysler Automobiles hoping to raise about $1 billion from IPO

Published: October 13, 2015, 12:00 AM
Updated: April 29, 2018, 1:35 PM

Ferrari LaFerrari

2016 Ferrari 488 GTB steering wheel

You may not be able to afford that Ferrari you’ve always dreamed of but that doesn’t mean you can’t own a piece of Ferrari, now that the Italian supercar maker is preparing to go public.

Fiat Chrysler Automobiles (FCA) is hoping to raise about a $1 billion (U.S.) from over 17 million common shares to be traded on the New York Stock Exchange under the ticker symbol RACE, though a posting date has not been set. That’s nine percent of Ferrari shares (analysts peg the value of Ferrari at about $12 billion) offered to the public at an initial price of between $48 and $52 per share, with another one percent going to underwriters of the initial public offering (IPO). Piero Ferrari (founder Enzo’s son) will keep his 10% stake in the company, while Fiat’s Agnelli family (which currently holds a 30% interest in Ferrari) is expected to retain the bulk of the remaining 80% in order to prevent a future takeover. The remaining shares are expected to be offered to existing shareholders.

Ferrari has limited production of its cars in past years to 7,000 per year, in order to have demand always exceed supply and keep the brand desirability high. But before potential investors start to think that means they won’t realize a return on their investment, the company has announced plans to raise annual output to 9,000, but has dispelled notions of expanding into other segments (most notably, the profitable utility vehicle segment other ultra-luxury companies have embraced).

The proceeds from the IPO will go toward funding other FCA ventures, including Alfa Romeo as it prepares to launch several new vehicles to expand its stable for markets such as North America, as well as the distribution of Jeep and Maserati brands in other world markets.

Renamed Ferrari N.V., the company will operate separately from FCA in 2016.