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FCAU - Fiat Chrysler Automobiles


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Union Talks With Auto Makers to Focus on Tiered Pay

http://www.wsj.com/articles/union-talks-with-auto-makers-to-center-on-tiered-pay-1436748183

 

Interesting article - Makes me wonder if this entire merger angle has some sort of connection with upcoming negotiations with UAW.

 

Mr. Bryce, however, said Fiat Chrysler’s pursuit of a merger has already rattled entry-level workers. “Instead of ‘strike talk’, now the concern is whether they should agree to anything offered to save their jobs.”
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Is it just me or does Marchionne seem positively giddy about 2Q earnings? (Maybe giddy is the wrong word. It seems like he is smirking?)

 

http://finance.yahoo.com/video/sergio-marchionne-m-worry-more-185300052.html

 

Was literally about to post the same thing. "We're about to release quarter 2 earnings and you can determine if we're desperate or not."

 

I had sold about 1/4th of my position a few months back at around $16 per share to lock in gains, but just repurchased it on his comments.

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I'm very new to this industry and this comment might be ignorant but why would Fiat spin Ferrari and argue that M&A and scale are vital to the industry and company going forward?  Isn't this a contradiction even if Ferrari is a much smaller division? There has to be synergies by keeping Ferrari either way.

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I'm very new to this industry and this comment might be ignorant but why would Fiat spin Ferrari and argue that M&A and scale are vital to the industry and company going forward?  Isn't this a contradiction even if Ferrari is a much smaller division? There has to be synergies by keeping Ferrari either way.

 

Ferrari isnt a large scale auto manufacturer. They wouldn't benefit much from consolidation compared to other brands. They also arent as correlated to the auto market as other brands.

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I'm very new to this industry and this comment might be ignorant but why would Fiat spin Ferrari and argue that M&A and scale are vital to the industry and company going forward?  Isn't this a contradiction even if Ferrari is a much smaller division? There has to be synergies by keeping Ferrari either way.

 

Ferrari isnt a large scale auto manufacturer. They wouldn't benefit much from consolidation compared to other brands. They also arent as correlated to the auto market as other brands.

 

Right. And let's not forget that Marchionne needs the IPO money to fund his plans.

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I'm very new to this industry and this comment might be ignorant but why would Fiat spin Ferrari and argue that M&A and scale are vital to the industry and company going forward?  Isn't this a contradiction even if Ferrari is a much smaller division? There has to be synergies by keeping Ferrari either way.

 

Ferrari isnt a large scale auto manufacturer. They wouldn't benefit much from consolidation compared to other brands. They also arent as correlated to the auto market as other brands.

 

Right. And let's not forget that Marchionne needs the IPO money to fund his plans.

 

Beyond those, the announcement also boosted the stock price quite a bit before they announced the issuance of convertible debt so it gave them much, much better pricing terms then they otherwise may have received.

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I'm very new to this industry and this comment might be ignorant but why would Fiat spin Ferrari and argue that M&A and scale are vital to the industry and company going forward?  Isn't this a contradiction even if Ferrari is a much smaller division? There has to be synergies by keeping Ferrari either way.

 

Ferrari isnt a large scale auto manufacturer. They wouldn't benefit much from consolidation compared to other brands. They also arent as correlated to the auto market as other brands.

 

Right. And let's not forget that Marchionne needs the IPO money to fund his plans.

 

Beyond those, the announcement also boosted the stock price quite a bit before they announced the issuance of convertible debt so it gave them much, much better pricing terms then they otherwise may have received.

 

Yup. When it comes to Marchionne, I always find it helpful to remember that while everyone else is playing chess, he's playing 3D chess. #mancrush

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I'm very new to this industry and this comment might be ignorant but why would Fiat spin Ferrari and argue that M&A and scale are vital to the industry and company going forward?  Isn't this a contradiction even if Ferrari is a much smaller division? There has to be synergies by keeping Ferrari either way.

 

Ferrari isnt a large scale auto manufacturer. They wouldn't benefit much from consolidation compared to other brands. They also arent as correlated to the auto market as other brands.

 

Right. And let's not forget that Marchionne needs the IPO money to fund his plans.

 

Beyond those, the announcement also boosted the stock price quite a bit before they announced the issuance of convertible debt so it gave them much, much better pricing terms then they otherwise may have received.

 

Excellent points all, and I'd add that Ferrari should get valued at a much higher multiple than traditional carmakers. 

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This is admittedly far-fetched, but has nonetheless crossed my mind: it also reduces potential ultra-luxury market anti-trust issues that could arise should VW start sniffing around.  Maybe that wouldn't be an issue anyway (no one seems to care at least), but regardless, it almost certainly isn't anymore.

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When is the Ferrari IPO coming? I'm tired of waiting. I want Ferrari now!!!!!!!! >:( >:( >:(

 

Yea. I'm tired of the wait too since that was the main reason I purchased it prior to it's U.S. listing a year ago. They said they had to wait until October at the earliest due to some tax reasons that have something to do with the recent reorganization of the company.

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Bill Nygren of Oakmont Funds on TV at lunch talking about FCAU which he recently bought. Said Ferrari is worth $6 a share and likes Marchionne and his track record and if they can meet their goal of getting margins up to F/GM levels, will be $3 a share in profit, so you are paying $9 for $3 in earnings.

 

So if you put a 10 p/e on $3, gives a $30 stock plus $6 for Ferrari, so up 140% from current price

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LONDON, July 23, 2015 /PRNewswire/ --

 

Fiat Chrysler Automobiles N.V. ("FCA") announced today that its subsidiary, New Business Netherlands N.V. (to be renamed Ferrari N.V.), has filed a registration statement on Form F-1 with the U.S. Securities and Exchange Commission ("SEC (SCUR)") for a proposed initial public offering of common shares currently held by FCA.  The number of  common shares to be offered and the price range for the proposed offering have not yet been determined, although the proposed offering is not expected to exceed 10% of the outstanding common shares.  In connection with the initial public offering, Ferrari intends to apply to list its common shares on the New York Stock Exchange.

 

UBS Investment Bank, BofA Merrill Lynch and Banco Santander are acting as Joint Bookrunners for the offering and UBS Investment Bank is acting as Global Coordinator.

 

The registration statement relating to these securities has been filed with the SEC but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell, or the solicitation of an offer to buy, these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

 

The offering will be made only by means of a prospectus. When available, copies of the preliminary prospectus related to the offering may be obtained from: UBS Securities LLC, Attention: Prospectus Department, 1285 Avenue of the Americas, New York, New York, 10019, or by calling toll-free at 1-888-827-7275; BofA Merrill Lynch, Attention: Prospectus Department, 222 Broadway, New York, NY 10038, via email: dg.prospectus_requests@baml.com; and Banco Santander, Attention: Global Banking and Markets, Ciudad Financiera Grupo Santander, Avenida Cantabria s/n - Edif. Encinar - 1st Floor, 28660 - Boadilla del Monte, Madrid - Spain, or Santander Investment Securities Inc., 45 East 53rd Street, New York, NY 10022.  Attention:  ECM.

 

This press release contains forward-looking statements. These statements are based on the Group's current expectations and projections about future events and, by their nature, are subject to inherent risks and uncertainties. They relate to events and depend on circumstances that may or may not occur or exist in the future and, as such, undue reliance should not be placed on them. Actual results may differ materially from those expressed in such statements as a result of a variety of factors, including: volatility and deterioration of capital and financial markets, including the possibility of a new Eurozone sovereign debt crisis, changes in commodity prices, changes in general economic conditions, economic growth and other changes in business conditions, weather, floods, earthquakes or other natural disasters, changes in government regulation, production difficulties, including capacity and supply constraints, the proposed separation of Ferrari and many other risks and uncertainties, most of which are outside of the Group's control.

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Greenwood just released their FCAU research update.  They think the share price could nearly triple by the end of next year. 

 

http://www.gwinvestors.com/2015/07/22/fca-research-update-fasten-your-seat-belts/

 

Fingers crossed. If Ferrari catches a rich multiple, like I'm hoping for, then I'll happily convert those shares into more FIAT if prices remain attractive. I am actually under the impression that shares of FIAT will likely crater after the IPO as one of the main catalysts for the recent share surge seems to have been announcement of the spin-off. People want Ferrari, but few want FIAT.

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