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More positive news on FCAU....

 

 

Fiat Chrysler Automobiles NV FCA, +2.26% FCAU, +7.19% said late Thursday it plans to invest more than $1 billion to modernize a plant in Michigan to make the next generation of its Ram heavy-duty trucks by 2020. The production of the trucks will be relocated to the Michigan factory from a plant in Mexico, Fiat Chrysler said. The move will create 2,500 new jobs, the company said, adding the announcement was made possible in part by the U.S. tax overhaul. The Mexican plant will be "repurposed" to make future commercial vehicles for the global market, the car maker said. In the same statement, Fiat Chrysler said it will pay a $2,000 bonus to about 60,000 hourly and salaried U.S. employees, excluding senior executives, in the second quarter. American Depositary shares of Fiat Chrysler rose nearly 5% in late trading after ending the regular session up 7.2%.

 

 

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It's interesting that the stock was up in Milan 50 bps yesterday after Sergio's interview and it's down 2.50% today on the NYSE.  I'm not sure if there's an explanation.  I believe the reason it's down today is because there was a false perception that Jeep was going to be spun-off, which was never the case, and that was confirmed yesterday.

 

Do they post the video of these interviews anywhere on the web?

 

 

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https://finance.yahoo.com/news/fca-net-profits-nearly-doubles-131101687.html

Fiat Chrysler Automobiles reported net profit for last year hit 3.5 billion euros ($4.3 billion), compared with 1.8 billion a year earlier, as the company cut its industrial debt nearly in half to 2.4 billion euros.

Net revenues for the year were nearly 111 billion euros, shy of the revenue target of 115 million euros to 120 million euros. Adjusted net profit of 3.7 billion euros exceeded guidance of above 3 billion euros.

 

Fiat issued full-year 2018 guidance of net revenues above 125 billion euros and adjusted net profit around 5 billion euros. Fiat Chrysler CEO Sergio Marchionne said the carmaker aimed to report zero debt when it reports second-quarter earnings.

 

Marchionne, who is planning to step down as CEO next year, said he would lay out the company's new five-year business plan on June 1.

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FY2017 results:

https://www.fcagroup.com/en-us/investors/financial_regulatory/pages/latest_financial_results.aspx

 

 

First time Sergio hints at returning capital to shareholders:

https://seekingalpha.com/article/4140241-fiat-chrysler-automobiles-fcau-ceo-sergio-marchionne-q4-2017-results-earnings-call-transcript

 

 

Sergio Marchionne

 

If I can just try and take Richard off the hot seat here, this otherwise he is going to get himself into trouble. This question about what we do with capital structure for the group going forward, best reserve for the June 1 presentation. It needs to go through a scrubbing process with the board which is ultimately responsible for this business, we are going to air all so called dirty laundry or versions of dirty laundry with the board, between now and June 1 that I think Richard will be a lot more comfortable giving you as views on structure and share buybacks and dividends then.

 

...

 

 

So by all means, when you hear about his plan on June 1, you should be the first person to criticize any -- that we creating expansion theory that I designed to conquer the world to the expense of shareholders. I did this obligation that we have is to be fair not only to our people and to the constituency of people whose lives have been interested to us that also big too.

 

To be fair for the people who provide us capital and to compensate them for their usage. Including share buybacks and the cash accumulation we have to justify it. I’m a proponent of contraction of capital. I think if I can give any advice to my successor and to the board as they should be an integral part of the plan coming forward until 2022. So I'll leave you with that. And then we'll talk on June 1st.

 

 

 

 

 

 

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Does anyone know what the ex date will be in order to get the Spinoff, or what the spin off ratio will be?

Besides being a standard special situation, there seems to be an opportunity here to buy FCAU before the spinoff, sell the spinoff stock at open and therefore have acquired FCAU for a pretty low valuation.. Am I missing something?

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Does anyone know what the ex date will be in order to get the Spinoff, or what the spin off ratio will be?

Besides being a standard special situation, there seems to be an opportunity here to buy FCAU before the spinoff, sell the spinoff stock at open and therefore have acquired FCAU for a pretty low valuation.. Am I missing something?

 

Is your logic that FCAU will trade at the same price post spin? That is not a good assumption. You are betting that FCAU will continue to increase in value post spin, you are not capitalizing on a special situation.

 

All other things being equal (no major changes in the FCAU business ), if FCAU is trading at X I expect it to trade around X - SPINOFF value post spin. If anything I would expect the spin off will trade at a depressed value initially while index funds, mutual funds and others who are not interested in holding the spin off sell their shares. In addition to that who knows when the spin off shares will hit your account. There will likely be many more parties selling their shares and running down the price before you get the chance to sell your shares, unless you wanted to short them at open.

 

 

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Does anyone know what the ex date will be in order to get the Spinoff, or what the spin off ratio will be?

Besides being a standard special situation, there seems to be an opportunity here to buy FCAU before the spinoff, sell the spinoff stock at open and therefore have acquired FCAU for a pretty low valuation.. Am I missing something?

 

Do you think EXOR will be selling their Magneti Marelli spinCo shares?

Why is FCAU spinning this off?

 

a) They don't want it?  (it's dragging down the rest of the company)

b) They want to draw attention to the public market value of the various FCAU holdings

c)  ??

 

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I love Sergio sometimes:

 

Marchionne had long refused to jump on the electrification bandwagon, saying he would only do so if selling battery-powered cars could be done at a profit. He even urged customers not to buy FCA’s Fiat 500e, its only battery-powered model, because he was losing money on each sold.

 

The very next paragraph cites Tesla's "success" which -- sure, Tesla's valued to the skies, but also, they haven't figured out how to sell battery-powered cars at a profit.

 

I wonder if they have regular strategy check-ins on that.

 

"Next up, R&D -- is there a way to make a profitable electric car at scale?"

"Not yet."

"Thanks. How we are we doing on spinning off the parts businesses?"

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anyone have the details (time and such) /weblink for the business plan update tomorrow?  I didn't see it come across anywhere.

 

Can't find anything either. Not on their website nor anywhere else.

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