Ferrari is making its foray into the US stock exchange and possibly in Europe. It is for the first time that Fiat is pushing forth its premium and rare Ferrari into the car market.
Ferrari is known more for its premium and high price sports car and its shares will be floated on US stock exchange and perhaps in Europe. However 90% of the shares will be pocketed by the existing shareholders in the Fiat Chrysler Automobiles group.
As the news came out, shares of FCA shot up by more than 14%. The spinoff is seen by experts as unlocking the value for investors who own the shares after the restructuring takes effect.
John Elkann chairperson said, “I am delighted to have taken this additional step in the development of FCA. Coupled with the recent listing of FCA shares on the NYSE, the separation of Ferrari will preserve the cherished Italian heritage and unique position of the Ferrari business.”
Ferrari and Formula One racing are synonymous with one another and the team’s logo of a stallion embossed upon a red background can be instants recognized by everyone including those who are not very knowledgeable about Formula One racing.
The spinoff is expected to be accomplished next year and the company’s shares are expected to be listed in the US and European Exchanges.
Sergio Marchionne, Fiat head said, “pursuing separate paths for FCA and Ferrari was the best course of action to support the long term success of the Group while at the same time substantially strengthening FCA’s capital base.”
The news of the spinoff came after a boardroom split which saw Luca Cordero di Montezemolo, its president of 23 years, falling from his perch. Luca Cordero di Montezemolo and Marchionne had clashed over sales strategies.
Montezemolo wanted to maintain the rarity of Ferrari by limiting the sales to some 7000 cars per year. Marchionne on the other hand was pushing Ferrari to help Fiat Chrysler move into the premium end of the car market.
The bitterness was evident when the outgoing president was quoted by Italian fourth estate that, “Ferrari is now American”, which meant “the end of an era”.