Ferrari shares race ahead 15 percent on Wall Street debut

Wed Oct 21, 2015 1:18pm EDT
 
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By Lauren Hirsch and Agnieszka Flak

NEW YORK/MILAN (Reuters) - Ferrari (RACE.N: Quote) shares jumped 15 percent to $60 on its Wall Street debut on Wednesday after the Italian supercar maker priced its share offering at the top of the range amid heavy investor demand.

Limiting the offering to a 10 percent stake helped parent Fiat Chrysler Automobiles (FCA)(FCHA.MI: Quote) to leverage the scarcity factor to squeeze out value, defying a choppy U.S. market on which several big initial public offerings (IPOs) have been discounted or delayed this year.

FCA, which sold shares in Maranello-based Ferrari at $52 each, could raise up to $982 million if a "greenshoe" option is exercised, giving the sportscar business a stock market value of $9.8 billion.

Ferrari Chief Executive Amedeo Felisa and Chairman Sergio Marchionne were at the New York Stock Exchange to ring the opening bell, along with the company founder's son Piero Ferrari and FCA Chairman John Elkann, whose Agnelli family will become Ferrari's top investor on the planned distribution of the rest of FCA's stake in Ferrari among its own shareholders next year.

Marchionne, who is also FCA's chief executive, has sought to position Ferrari as a luxury goods business to win the high-flying trading multiples of companies such as Hermes (HRMS.PA: Quote) and Prada (1913.HK: Quote).

But some analysts questioned whether the small-volume, capital-intensive carmaker will be able to sustain the high valuations beyond its racy market debut.

Proceeds from the offering will help to fund FCA's turnaround plan, centered on revamping its Alfa Romeo, Jeep and Maserati brands in an attempt to boost sales to 7 million cars by 2018 and compete with premium segment rivals BMW (BMWG.DE: Quote) and Volkswagen-owned Audi (VOWG_p.DE: Quote).

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FCA Chief Executive and Ferrari Chairman Sergio Marchionne speaks to members of the media as he walks outside the New York Stock Exchange October 21, 2015.  REUTERS/Lucas Jackson