FCAU - Fiat Chrysler Automobiles

[LC]

so the thesis of this investment is cost cuts coming out of Chrysler-Fiat will offset losses in Europe? Or, that spinoffs (Ferrari) will protect value? Brazil and Italy are still issues I'm wrestling with. How should we view this?

 

Ferrari is worth 5.5 per share on spin off. The rest is just a call option.

Actually, if you believe Chrysler is also worth more than 2.6 per share, Alfa and Maserati are just call options.

 

Generally how I view the situation as well. Bonus points for Brazilian capacity, any turnaround in Europe, etc.

[muscleman]

I agree that as soon as street valuation is done, Sergio will close the the deal, maybe before year end.

 

I predict that Fiat will pop 30%.

 

@indirect: i agree with you. i also think it will be Close before years end.

 

Yeah. I added today. Now I have 23% instead of 13% in this baby. :)

 

nice muscleman that you added today :)

 

the Company is today worth 10b.$ and have so much nice assets as muscleman mentioned. I love that.

way undervalued

 

I also added this from 13% to 30% in my 401K plan.

Too bad that I am leaving current employer, and the new employer does not allow me to trade stocks in 401k. >:(

[valueinvesting101]

May be you can rollover your old 401K to IRA instead of new employer's 401k. I believe you can do that.

[muscleman]

May be you can rollover your old 401K to IRA instead of new employer's 401k. I believe you can do that.

 

Yeah I can. But for the new employer's 401k, I can only choose between a few mutual funds. :(

[jch548]

Friday the WSJ had a story on Fiat's joint venture in China with Guangzhou Automobile Group. Their plant has a capacity to produce 140,000 cars per year. They only produced 11k autos in 2012 but should do 38k in 2013. They are currently producing the Viaggio sedan. They will be adding another shift in 2014 to begin producing the Ottimo hatchback. They also expect to have 170 dealerships by the end of 2014.

 

I need to look at their latest report to see how their other brands are doing in China. I'm sure they sell Ferrari in China but Mazerrati and Alpha? There should be a great deal of opportunity in China now the world's largest auto market. Sales are almost 20mm autos a year. They like luxury brands and an Italian brand could be very appealing to them. The Japanese had a 25% market share in China which has dropped to 15% due to negative sentiments toward Japan. That's 2mm auto sales a year the Japanese are missing. Fiat should be able to grab some of that.

 

[phil_Buffett]

http://online.wsj.com/news/articles/SB10001424052702304281004579218201897539412

[Ian L]

Chrysler ipo will not go ahead in 2013.

 

http://www.reuters.com/article/2013/11/25/us-fiat-chrysler-idUSBRE9AO0ER20131125?feedType=RSS&feedName=topNews&utm_source=dlvr.it&utm_medium=twitter&dlvrit=992637

[phil_Buffett]

Chrysler ipo will not go ahead in 2013.

 

http://www.reuters.com/article/2013/11/25/us-fiat-chrysler-idUSBRE9AO0ER20131125?feedType=RSS&feedName=topNews&utm_source=dlvr.it&utm_medium=twitter&dlvrit=992637

 

so we are Close to a Settlement? if there is no ipo in december ?

[nikhil25]

On the contrary, wouldn't this be indicative of a delay in the settlement with VEBA? I can't see why they would delay the IPO process if a deal with VEBA was around the corner...

[LC]

On the contrary, wouldn't this be indicative of a delay in the settlement with VEBA? I can't see why they would delay the IPO process if a deal with VEBA was around the corner...

 

Well if they're firming up a deal finally, wouldn't they slow the IPO process in case they can finish the deal, then they wouldn't need to go through with the IPO?

[phil_Buffett]

On the contrary, wouldn't this be indicative of a delay in the settlement with VEBA? I can't see why they would delay the IPO process if a deal with VEBA was around the corner...

 

Well if they're firming up a deal finally, wouldn't they slow the IPO process in case they can finish the deal, then they wouldn't need to go through with the IPO?

 

my take is if the dont make a deal they would definitely go on with an ipo. now they stop the ipo process and this means for me, fiat make the VEBA clear that they dont get what they want with this ipo and they have to pay fees and etc.

so now the parties work on a Settlement maybe 4,2-4,4b.$ i guess and let this deal gone trough. the VEBA Needs Money and Marchionne now has the better Hands in this game

[nikhil25]

On the contrary, wouldn't this be indicative of a delay in the settlement with VEBA? I can't see why they would delay the IPO process if a deal with VEBA was around the corner...

 

Well if they're firming up a deal finally, wouldn't they slow the IPO process in case they can finish the deal, then they wouldn't need to go through with the IPO?

 

my take is if the dont make a deal they would definitely go on with an ipo. now they stop the ipo process and this means for me, fiat make the VEBA clear that they dont get what they want with this ipo and they have to pay fees and etc.

so now the parties work on a Settlement maybe 4,2-4,4b.$ i guess and let this deal gone trough. the VEBA Needs Money and Marchionne now has the better Hands in this game

 

Both fair points. I'm just really surprised at the announcement given yesterday's article in WSJ about the company's plan to file in mid-December.

[phil_Buffett]

On the contrary, wouldn't this be indicative of a delay in the settlement with VEBA? I can't see why they would delay the IPO process if a deal with VEBA was around the corner...

 

Well if they're firming up a deal finally, wouldn't they slow the IPO process in case they can finish the deal, then they wouldn't need to go through with the IPO?

 

my take is if the dont make a deal they would definitely go on with an ipo. now they stop the ipo process and this means for me, fiat make the VEBA clear that they dont get what they want with this ipo and they have to pay fees and etc.

so now the parties work on a Settlement maybe 4,2-4,4b.$ i guess and let this deal gone trough. the VEBA Needs Money and Marchionne now has the better Hands in this game

 

Both fair points. I'm just really surprised at the announcement given yesterday's article in WSJ about the company's plan to file in mid-December.

 

yeah thats the Point i think. after the spread for the ipo was forecasted, in my opinion fiat talk to VEBA and says well your IPO is not going well, let us make a Settlement and not make this ipo that only produces cost and not fullfill your estimates

[frommi]

Hm perhaps its only because of winter holidays and the end of the year is near?  :)

Be happy, more time to pick up FIAT cheap.  ;)

[phil_Buffett]

from Fiat

 

"No assurance can be given as to whether or when an offering will be launched as any launch will be subject to market conditions and other relevant considerations"

 

http://online.wsj.com/news/articles/SB10001424052702304465604579219734238798424

[muscleman]

On the contrary, wouldn't this be indicative of a delay in the settlement with VEBA? I can't see why they would delay the IPO process if a deal with VEBA was around the corner...

 

Well if they're firming up a deal finally, wouldn't they slow the IPO process in case they can finish the deal, then they wouldn't need to go through with the IPO?

 

my take is if the dont make a deal they would definitely go on with an ipo. now they stop the ipo process and this means for me, fiat make the VEBA clear that they dont get what they want with this ipo and they have to pay fees and etc.

so now the parties work on a Settlement maybe 4,2-4,4b.$ i guess and let this deal gone trough. the VEBA Needs Money and Marchionne now has the better Hands in this game

 

Both fair points. I'm just really surprised at the announcement given yesterday's article in WSJ about the company's plan to file in mid-December.

 

yeah thats the Point i think. after the spread for the ipo was forecasted, in my opinion fiat talk to VEBA and says well your IPO is not going well, let us make a Settlement and not make this ipo that only produces cost and not fullfill your estimates

 

I watched FIATY's bid/ask for a while this morning, and it is constantly like bid 6000/ask 1000, or bid 3000/ask 1000, and sometimes even bid 11000/ ask 1000.

I know most people on this board doesn't believe technical analysis like trend lines and momentum indicators, but doesn't the simple bid/ask numbers tell something?

 

Anyway, let's get back to fundamentals. Why would they say IPO is expected in mid-December, and then in less than 24 hours, it is suddenly not practical to do so anymore?

http://online.wsj.com/news/articles/SB10001424052702304281004579218201897539412

http://online.wsj.com/news/articles/SB10001424052702304465604579219734238798424

 

Let's just compare the time of these two articles. I think it is more likely to be negotiations wrangling instead of "market conditions".

[phil_Buffett]

 

 

Anyway, let's get back to fundamentals. Why would they say IPO is expected in mid-December, and then in less than 24 hours, it is suddenly not practical to do so anymore?

 

 

for me the only Explanation is, that fiat and the VEBA are saying ok lets talk and make a deal, instead of this IPO process. If the do the IPO it is clear the Fiat has the better Cards, so they work on a deal without the IPO.

[Guest hellsten]

Added to FIATY today, which was already a large position. I'm betting Mohnish Pabrai and Guy Spier are right.

[phil_Buffett]

Added to FIATY today, which was already a large position. I'm betting Mohnish Pabrai and Guy Spier are right.

 

hellsten iam with you. Mohnish loves Fiat and i know it will work.  ;D

 

i have already 30% of my Portfolio in Fiat so i will watch it out  :)

[muscleman]

Added to FIATY today, which was already a large position. I'm betting Mohnish Pabrai and Guy Spier are right.

 

hellsten iam with you. Mohnish loves Fiat and i know it will work.  ;D

 

i have already 30% of my Portfolio in Fiat so i will watch it out  :)

 

You are as crazy as I am!

I sold my EXOR positions and bought more fiaty, and now I have 30% in Fiaty too.

[phil_Buffett]

Added to FIATY today, which was already a large position. I'm betting Mohnish Pabrai and Guy Spier are right.

 

hellsten iam with you. Mohnish loves Fiat and i know it will work.  ;D

 

i have already 30% of my Portfolio in Fiat so i will watch it out  :)

 

You are as crazy as I am!

I sold my EXOR positions and bought more fiaty, and now I have 30% in Fiaty too.

 

good to found another Buddy who is crazy sometimes :). i think muscleman we are right. in two years we can see back. for me fiat is amazing cheap and the market and all of the "top" (not  ;D) Analysts dont see what is in this Company. for marchionne is a great Manager and leader. he Plays the game with the veba. say no to a high Settlement, they then want a ipo because the VEBA thinks they can generate 5b.$ and more. Marchionne said ok lets do it. Now after more clear indicators about a ipo come in, and the potential range for pricing, marchionne now has the better Cards. he knows that veba Need Money and very quickly. i think we will never see an ipo and they will settle before year end

[nikhil25]

http://www.businessweek.com/news/2013-11-25/chrysler-ipo-said-delayed-to-2014-over-tax-confusion-in-u-dot-s-dot-1

 

"Chrysler Group LLC’s initial public offering was delayed after the automaker wasn’t able to resolve a routine tax issue quickly enough to complete the sale this year, three people with knowledge of the matter said.

 

Chrysler needs a letter from the U.S. Internal Revenue Service to clarify tax liabilities after the IPO and didn’t want to proceed without it, said the people, who asked not to be identified because the matter is private. An offering of union-held shares may be held in the first quarter, said Fiat, which owns 58.5 percent of the third-largest U.S. automaker.

 

Not Close

Fiat and a United Auto Workers retiree medical trust aren’t close to a deal that would give Fiat full ownership, two people said. Fiat, which took control of the U.S. automaker as part of its 2009 reorganization. The trust and Fiat are disputing Chrysler’s value as Marchionne seeks to buy the union fund’s 41.5 percent stake."

[phil_Buffett]

this fiat chrysler dealgame reminds me a lot to the MBIA/BAC litigation game. a lot of uncertainty, a lot of good articles, a lot of negative articles, stock up and down, and then one day boom +40%. it was great.

 

i trust Sergio marchionne and like it very much how he talks about the future, the brands , etc and lead the Company. it is not important if they settle this on dec 1 or dec 31 or jan 17 etc. the next years will be very bright for the fiat Group, i like the assets, the brands and the Chance to get a premium brand in the USA very cheap. Fiat will settle with the VEBA, i see no ipo.

 

I hold my Shares for the Long term

[nikhil25]

this fiat chrysler dealgame reminds me a lot to the MBIA/BAC litigation game. a lot of uncertainty, a lot of good articles, a lot of negative articles, stock up and down, and then one day boom +40%. it was great.

 

i trust Sergio marchionne and like it very much how he talks about the future, the brands , etc and lead the Company. it is not important if they settle this on dec 1 or dec 31 or jan 17 etc. the next years will be very bright for the fiat Group, i like the assets, the brands and the Chance to get a premium brand in the USA very cheap. Fiat will settle with the VEBA, i see no ipo.

 

I hold my Shares for the Long term

 

Ditto. I think the delay/negotiation only adds some short-term volatility and I continue to stay optimistic from a long-term perspective.

[racemize]

Has anyone looked at Volkswagen?  They seem to be somewhat cheap (though not as cheap as FIAT) relative to Ford/GM and also have quite a few premium brands.