- Category: Economic
- Published Monday, January 4, 2016
- CTV News
MILAN - Sports carmaker Ferrari is following up its successful Wall Street listing with a stock market launch in Milan, as it begins a new era as a stand-alone company free of the mass-market associations of its former parent, Fiat Chrysler.
The company famed for its Formula 1 racing machines and coveted red roadsters began trading Monday morning, the first business day of the year, at 43 euros ($47) under the RACE ticker. The shares slipped to 41.75 euros in a broadly lower market, were briefly suspended and then climbed to 41.90 euros.
Ferrari made its public debut on the New York Stock Exchange in October. It closed out 2015 at the price of $48 (about 44 euros).
The new company, which completes its separation from Fiat Chrysler Automobiles SpA, is controlled by Exor SpA, the Agnelli family holding company that also controls Fiat Chrysler, with a 23.5-per cent share, and Piero Ferrari, founder Enzo Ferrari's son, who retains a 10-per cent stake.
"With the listing, a new chapter is opened," for Ferrari, said its chairman, Sergio Marchionne, who is also CEO of Fiat Chrysler. Marchionne called the development a "new threshold, a new starting line" for the prestigious brand.
But he is treading carefully with any plans to expand the Ferrari brand, whose value relies on its exclusivity. Marchionne wants to turn Ferrari into a luxury goods company in order to profit more from the brand's prestige.
Ferrari is "probably the most difficult brand extension" to develop, Marchionne told a news conference, and so the company intends to avoid doing "anything big and stupid."
"If you put a Ferrari sticker on a toaster it doesn't go faster," said Marchionne.
Back in October, for the NYSE listing, Fiat Chrysler listed a 10 per cent stake at $52 a share, valuing the company at nearly $10 billion.
For the parallel Milan listing, Fiat Chrysler distributed its remaining 80 per cent to its shareholders, at a rate of one common share of Ferrari for every 10 shares of Fiat Chrysler.
The spinoff will help Fiat Chrysler reduce debt and fund ambitious plans to expand higher-margin luxury brands Alfa Romeo and Maserati.
Until the October launch, the automaker, based in the northern Italian town of Maranello, had been a private company since its founding in 1929 by Italian sports car driver Enzo Ferrrari.
In 1969, Fiat bought a 50 per cent stake in the company, which it then increased to 90 per cent in 1988.
As for Ferrari's race car mission, Marchionne said that the biggest challenge is to bring back the team as a Formula 1 winner.
AP writer Frances D'Emilio contributed from Rome.