Ferrari stock rockets, adding $10 billion on solid earnings—and the news that F1 GOAT Lewis Hamilton is joining its top racing team
Seven-time Formula One world champion Lewis Hamilton will make a shock switch from Mercedes to Ferrari for the 2025 season, and the market appears to like it. Ferrari’s stock price rose more than 12% on Thursday following reports of the move, which would swell its market capitalization by some $10 billion.
Of course, there’s a much bigger, more obvious reason Ferrari’s stock is on the move—the Italian auto giant also announced fourth-quarter earnings on Thursday, seeing adjusted earnings, before interest, taxes, depreciation, and amortization (EBITDA) of over $2.64 billion for 2024, up from $2.48 billion in 2023, while reporting revenue for 2023 broadly in line with expectations. It dimly recalls Netflix's banner week in January, after the streaming leader announced 12% revenue growth and 13.1 million added subscribers in its fourth quarter, but also a $5 billion deal with WWE to stream live events. Its stock jumped almost 11% the next day.
But why is Hamilton joining Ferrari a big deal? Well, because he's the greatest of all time, or the GOAT, for short. And while Netflix didn't make Hamilton the greatest driver in history, it certainly boosted his profile and contributed to his impact on Ferrari's stock.
Hamilton, Netflix, Mercedes, and Ferrari
Hamilton, F1’s winningest driver with 103 grand prix victories, is ranked No. 21 on Forbes’ World’s Highest Paid Athletes list in 2023 with a $55 million salary, plus $10 million in endorsements. His profile, and that of his sport, has swelled thanks to exposure on the dominant streaming service Netflix.
The driver signed a two-year contract with Mercedes in August, reported to be worth over $120 million, that would keep him with the team through the 2025 season. First signed to Mercedes for the 2013 season, Hamilton won six of his seven championships with the team, and has shot to a new level of fame along with his sport on the back of the hit Netflix Drive to Survive documentary series.
Mercedes was valued at $3.8 billion in 2023, up from just over $1 billion when Liberty Media bought F1 in 2017, then launched Drive to Survive and implemented a cost cap across all teams to increase profitability. Its rival is Ferrari, which has raced in F1 since the sport’s 1950 inception and is the highest valued team, worth $3.9 billion.
Mercedes announced that Hamilton will leave Mercedes at the end of this year and replace Ferrari driver Carlos Sainz and drive alongside Charles Leclerc. Hamilton activated an exit clause in his Mercedes contract that allowed him to leave the team a year earlier than expected, giving Ferrari an opportunity to sign Hamilton on a multi-year contract.
Hamilton was linked to Ferrari in May in the midst of contract negotiations with Mercedes, but he denied the switch at the time.
"I'd be lying if I said I'd never thought about ending my career anywhere else,” Hamilton told ESPN. "I thought about and watched the Ferrari drivers on the screens at the track and of course you wonder what it would be like to be in red... But then I go to my team, to Mercedes, and this is my home. I'm happy where I am. I haven't signed a contract yet, but we are working on one."
Mercedes declined to comment to Fortune on Hamilton’s move.
This story was originally featured on Fortune.com
