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Ferrari is Fast Approaching the IPO-Launch Finish Line

A Clark

Legendary Italian automaker Ferrari could be launching the “road show” for its IPO as early as Friday, according to some reports. The IPO was originally filed with the Securities and Exchange Commission by Ferrari’s current parent company Fiat Chrysler Automobiles (FCAU) in July earlier this year.

The Maranello, Italy-based high-end sports car maker will be renamed Ferrari NV as a new spin-off business from Fiat Chrysler, and could be valued anywhere from $6 to $11 billion. According to filings with the SEC, about 10% of the common shares of the new entity will be available to the public, with another 80% of the shares being distributed to current Fiat Chrysler shareholders. The remaining approximate 10% would be owned by Piero Ferrari, the son of Ferrari founder Enzo Ferrari.

Ferrari is renowned for its small line of high performance sports cars, and is considered by many to be the ultimate luxury vehicle line. Ferrari shipped 7,255 automobiles in 2014, and recorded revenue of $3.08 billion. The company currently boasts 8 models, with its most expensive model, the LaFerrari, selling for upwards of $1.7 million. 

Demand for Ferrari’s IPO is expected to be high, and the deal could reach the $1 billion mark, possibly even surpassing it. Some analysts have cautioned against the company’s stock though, citing high tech costs for keeping its premium models up to speed and regulatory challenges regarding emissions.

Bottom Line

When most consumers, whether car fans or not, hear the name Ferrari, they instantly think of one of the company’s legendary vehicles, most likely in the color red.This brand recognition as well as the company’s overall strength will definitely be key factors in Ferrari’s eventual IPO, and it will be incredibly interesting to see how the offering is received by investors. It may pay off for investors to keep an eye on this offering, as the high demand behind it may help to make it a very successful launch.

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