FCAU - Fiat Chrysler Automobiles

[merkhet]

http://mobile.reuters.com/article/idUSKBN0N720E20150416?irpc=93

 

Unfortunate to hear that the Ferrari spin might slip until 2016. Can't imagine what the hold up is...

 

Marchionne said work to spin-off and list luxury unit Ferrari was ongoing and he expected the floatation to happen this year, although he suggested the process may spill over into 2016.

[sleepydragon]

http://mobile.reuters.com/article/idUSKBN0N720E20150416?irpc=93

 

Unfortunate to hear that the Ferrari spin might slip until 2016. Can't imagine what the hold up is...

 

Marchionne said work to spin-off and list luxury unit Ferrari was ongoing and he expected the floatation to happen this year, although he suggested the process may spill over into 2016.

 

 

maybe VW or Toyota want to buy/merge with Fiat, with Ferrari included?

Or maybe if there's a merger deal, it need to happen first, and then Ferrari spin?

:)

 

 

[cmlber]

http://mobile.reuters.com/article/idUSKBN0N720E20150416?irpc=93

 

Unfortunate to hear that the Ferrari spin might slip until 2016. Can't imagine what the hold up is...

 

Marchionne said work to spin-off and list luxury unit Ferrari was ongoing and he expected the floatation to happen this year, although he suggested the process may spill over into 2016.

 

Probably Sergio wanting the street to underwrite it based on 2015 EBITDA that will include a huge margin lift from 1.08 euro and possibly a capacity increase to 7500-8000 units.

[argonaut]

If it's put off; there might e another opportunity to buy again if the market corrects as well...

[fareastwarriors]

Fiat Chrysler Raises Vehicle Prices

 

No. 3 U.S. auto maker lifts wholesale prices to dealers, raises sticker prices on Ram and Jeep

 

http://www.wsj.com/articles/fiat-chrysler-raises-vehicle-prices-1429656481

[merkhet]

I wonder why are the activists of GM pushing for more buybacks instead of merging with FCAU and having Sergio to be the CEO of GM? That would probably end up much better than a simple share repurchase.

 

Even though US antitrust review has become quite lenient over the past few decades, GM merging with Chrysler would probably not pass.

 

From the GM thread -- I brought this up earlier with some other folks in that I can't quite figure out what Sergio is playing at with his consolidation talk. Neither GM nor Ford seems like they're biting -- additionally, the regulatory scrutiny may not pass muster.

 

So one has to wonder -- what's his game with the consolidation talk?

[constructive]

I wonder why are the activists of GM pushing for more buybacks instead of merging with FCAU and having Sergio to be the CEO of GM? That would probably end up much better than a simple share repurchase.

 

Even though US antitrust review has become quite lenient over the past few decades, GM merging with Chrysler would probably not pass.

 

From the GM thread -- I brought this up earlier with some other folks in that I can't quite figure out what Sergio is playing at with his consolidation talk. Neither GM nor Ford seems like they're biting -- additionally, the regulatory scrutiny may not pass muster.

 

So one has to wonder -- what's his game with the consolidation talk?

 

To add a little more color to my comment, I think the biggest hurdle would be pickup trucks. GM-Chrysler together make up 38% of pickup truck sales. Hard to argue that level of concentration would not be negative for consumers.

 

Also since the car industry is so iconic, there would be political pressure to block a merger both from an antitrust perspective as well as the perception of increasing, outsized foreign influence over a major American industry.

[fareastwarriors]

I thought the rumor mill was speculating a VW -FCAU merger (buyout).

[TwoCitiesCapital]

Hasn't Sergio worked the capital markets before - like announcing the Ferrari spin-off prior to the pricing of the convertible issuance which ended up resulting in significantly better pricing? Maybe he's looking for an acquisition or another share offering and looking to feed the animal spirits to get the price of the stock up?

[merkhet]

I thought about that, but he doesn't have the capital for an acquisition.

[ZenaidaMacroura]

I've always thought his shunning VW was also a way to exact a higher bid from them if/when they came knocking.  Is he just making it look like he has more potential suitors in the same vein?

[investor-man]

From comments Sergio has made in the past, I don't expect he'd want to remain a CEO after a merger, as is suggested above. I could maybe see him sticking around to run Ferarri, but everything he's indicated suggests to me that he is looking to retire

[sleepydragon]

This may be a wild idea: maybe Fiat merge with BYD? :)

Seems make sense to merge with a chinese auto maker. The automaker will instantly be able to sell in US market, and Fiat get lower labor costs (no unions). If they merge with BYD, they get the electric cars solutions which they currently don't have now.

[TwoCitiesCapital]

Surprised that no one has made any comment about the earnings:

 

http://seekingalpha.com/pr/13307586-fca-closed-q1-with-net-revenues-of-26_4-billion-up-19-percent-and-adjusted-ebit-at-800-million-up-22-percent-net-industrial-debt-was-8_6-billion-up-0_9-billion-full-year-guidance-confirmed

 

Evidently, earnings were above estimates, but the narrowing margins are a disappointment for some analysts. Ferrari IPO confirmed for Q3 2015 with spin-off anticipated in Q1 2016.

[ccap]

I didn't read this article very carefully, but the Constant Exchange Rate (CER) everywhere jumped out at me.

 

I wonder if the corollary to Munger's EBITDA=BS is CER=BS.

[karthikpm]

http://blogs.wsj.com/briefly/2015/04/29/5-reasons-fiat-chryslers-ceo-is-pushing-auto-industry-consolidation/?mod=yahoo_hs

[merkhet]

I wonder if the push back in Ferrari IPO & separation are what caused today's share price.

[karthikpm]

I wonder if the push back in Ferrari IPO & separation are what caused today's share price.

 

I thought it was driven by the perception of his statements on consolidation as a sign of weakness.. I thought it was known that Ferrari IPO was later in the year

 

 

[merkhet]

I believe most people thought it was going to be done by mid-year, but Sergio had been sending some soft signals that there might be a delay in the timeframe.

 

My immediate thought on the Ferrari IPO & spin-off being separated by a full quarter was whether Marchionne is looking to make the stock look better as a currency for some form of acquisition. Otherwise, why not have the spin-off closer to the IPO?

[ccap]

I've wondered about the consolidation push.  Does the CEO think he has a grenade with the pin pulled and needs to get rid of it before it blows?

[racemize]

anyone have a conference call transcript?  It isn't clear if seeking alpha is going to post one, given the history.

[compounding]

I wonder if the push back in Ferrari IPO & separation are what caused today's share price.

 

Don't think it necessarily has to do with anything in the presentations, all Euro automakers were down 2.5-5% yesterday.

[compounding]

I believe most people thought it was going to be done by mid-year, but Sergio had been sending some soft signals that there might be a delay in the timeframe.

 

My immediate thought on the Ferrari IPO & spin-off being separated by a full quarter was whether Marchionne is looking to make the stock look better as a currency for some form of acquisition. Otherwise, why not have the spin-off closer to the IPO?

 

Maybe it has something to do with the mandatory convertible? They are receiving shares from the spinoff as well, might be easier/cheaper to do it all at once?

[nikhil25]

This entire consolidation sales pitch is intriguing and I can see why the market is reacting negatively to it. I think it makes sense but the way he went about it was so unconventional that the market probably sees this as a desparate plea to bail them out. Even though, Sergio has categorically denied it, it also casts a shadow of doubt on FCA's 5 year plan to increase margins by invigorating growth of its premium line up (Maserati and Alfa). Besides, you can't help but wonder that if industry consolidation was such a no-brainer then why are none of the other players buying into it.

 

I'm just hoping that Sergio has an Ace up his sleeve that we don't know about...

[cmlber]

Question to everyone that's been following Fiat.  If you had the three presentations that were posted yesterday (earnings, consolidation, and NAFTA margins) before the market did, would you have expected the stock to be up or down? 

 

The NAFTA margin target of 7% in Q4 and 8-9% by 2018 is a huge positive.  The five year plan only assumed 6-7% margins in NAFTA!  Yet somehow the article headlines for the day were "Marchionne panicked because sales are rising but margins are falling." 

 

And quantifying 2.5-4.5 billion euros a year to be saved from M&A is huge.  Also finding out Brazil will break-even in this kind of economic environment is very positive news.

 

My 2 cents, Sergio was trying to talk the stock price up (clearly didn't work) because the holdup to M&A is the current stock price, he doesn't want to split up a MergeCo based on todays equity value.  He specifically talked about how embarrassing the valuation is in the exchange with the analyst who asked who is this presentation addressed to and told him he had more say in this then he thinks.