Ferrari IPO faces stiff competition from within its own ranks image

While Fiat Chrysler Automobiles CEO Sergio Marchionne might want to let everyone know the upcoming Ferrari stock public offering will be an easy achievement, there are still some questions to be answered.

For example, how are Ferrari’s shares going to compete and win investor attention when there are competitors from within the company’s ranks. For example, acquiring a vintage Ferrari supercar, from the Testarossa of the 1980’s down to models that fetch double digit million dollar purses at world auctions have delivered gains that might be hard to beat by the regular stock. Vintage models with the prancing horse logo have jumped almost seven-fold in value during the past decade, says the Hagerty Price Guide Index of Ferraris, which covers prices of 13 of the most important models from the 1950s onwards, including the Ferrari 250. Rob Johnson, managing director of Kirtlington, U.K.-based Classic & Sports Finance adds that even newer models, often called young timers have doubled in value in the past year alone. “Prices may not continue to go up like this forever, but they’re never going to crash because these are tangible assets,” he commented.

Fiat Chrysler Automobiles NV wants to list after mid-October a ten percent stake in Ferrari during an initial public offering. The performance might be hard to match even as the chief executive officer Sergio Marchionne believes the supercar division will be treated by investors as a luxury-goods maker. Such companies can trade at more than 20 times their forecasted earnings, which is around twice better than automotive stocks.

Via Automotive News Europe