Ferrari to debut on Wall Street
The long awaited spin-off of the iconic Ferrari sports car business from its parent Fiat will now take place in the second half of October, and what a dash it may prove to be. The long-time force in motorsports and, in particular, Formula One is all set to make a bit of a splashy statement on Wall Street, where they will be known with the Ticker name “RACE”. In a report from Reuters according to the prospectus which was submitted last week, the stock could be priced at as much as US$52 per share, which would put the value of the company at about US$9.8 billion.
For all of you Ferrari diehards out there, do not worry. There will be little change to the venerable old lady of the race track, but it does mean that Ferrari joins the ranks of companies that understand the value of its marketing cache to its investors. Other companies have tried to leverage their marketing at Wall Street – Harley Davidson goes by its beloved biker moniker “HOG” and Southwest Airlines lists as “LUV”, a nod to the company’s ties to Dallas Love Field. It’s likely that many aspiring hedge funders’ blood will boil at the incentive to trade on Ferrari as “RACE” pops up on their screens, with an estimated price of $48 to $52 per share, according to Reuters.
Ferrari’s current parent company, Fiat Chrysler Automobiles, will spin the entire brand off by next year. Piero Ferrari, the son of Enzo, will maintain a 10% stake in the company. Enzo long ago forbid his son from becoming a race car driver, proving that it generally pays off to sit in the owner’s suite, rather than to play for the team.
Ferrari’s racing roots date back to its founder, Enzo Ferrari, who was a race car driver for Alfa Romeo and built the Italian luxury brand around its products’ propensity for delirious performance and speed. He launched the Scuderia Ferrari racing team in 1929. While Ferrari has kept its production numbers on its cars purposely low, its prancing horse logo has created a merchandise goldmine. Racing is what continues to make its exotic production cars so appealing. Many of its owners race in a company-sponsored series. Meanwhile, classic Ferrari cars have been shattering records at auctions – last year, a 1962 Ferrari GTO Berlinetta sold for US$38.115 million dollars at the Bonhams auction, making it the most expensive car ever sold at auction.