What are your thoughts on the Ferrari IPO?
How long will it take for this public company to produce an equivalent of a 3 series BMW?
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Insane valuation expectations. CEO saying car manufacturer should trade at 20x 'cause Hermes....Should they pursue a 3-series model brand is fucked, IMO.
I agree.
Luxury brand, luxury valuation. Don't invest unless you want to get burned.
They're selling what, 12% of the business and fiat is retaining the remaining stake? It's hardly a blockbuster deal no matter which way you look at it.
On the other hand, Ferrari have been pretty explicit in stating that they won't devalue their brand by producing more vehicles. Their waiting list just keeps climbing so it is a very strong business, with arguably superior qualities compared to other luxury brands.
There's only a waiting list for great models like the 458 Spider, the 488, and (a few years back) all the GTO/GTB variants of the flagship 599 (now the TRS and SP America models of the F12 Berlinetta). And the LaFerrari of course.
Want a plain, run-of-the-mill 458? Walk into a dealership, you'll get quoted a couple weeks' delivery time.
I am absolutely not holding my breath thinking they'll preserve the brand integrity. The entire brand at this point exists to sell polo shirts, keychains, and backpacks. Lamborghini is not quite as bad but similar.
See what they did with Maserati? That brand has not been focused on producing track-worthy cars for I don't know how many years, but it still hurts to see the Ghibli roll off the production line.
They're highly likely to go more mass-market with a cheaper model. We already have the FF. Next is an SUV, just like the Bentayga from Bentley.
The 458 is actually replaced by the 488 you mentioned above which has a waiting list. Most new models (all maybe?) for the last two decades have had quite long waiting lists whenever they rolled off production. Regarding the SUV model, this rumour has been out for so long (I can def remember people talking about it from 2003/4) which I don't think will happen; it's very much not ferrari culture/heritage. Then again you never know. Luca di Montezemolo also mentioned they will not increase vehicle units production; which may mean they will increase prices instead. That's not bad decision per se, as increase in production may mean more capital to be invested in factory expansion, R&D etc. Series 3 Ferrari will not happen IMO, what may happen however is bringing back a quasi-separate brand, the Dino. I would say that for Ferrari going public that may actually harm their brand, or force them do things differently.
The biggest benificiary here would be fiat-Chrysler. They want/need to expand and putting Ferrari public may provide some good capital gains (increase their balance sheet) and capitalize (leverage) on that.
Maserati is owned by fiat. Ferrari will be completely independent of fiat's management after the IPO so I find it difficult to see the same forces that are driving change in Maserati's product line affecting Ferrari in the future.
Not only that Maserati has never had the same focus and pedigree from racing that Ferrari has; there's less brand to water down.
Lastly, the FF was a replacement for the 612 Scaglietti. Ferrari has almost always had one four-seater in their line-up so the FF hardly qualifies as some new mass-market model.
12% is an important consideration thanks for adding that. I didn't realize it was such a small stake.
Bad mistake....
Which bank(s) did this IPO?
Which bank(s) did this IPO?
Which bank(s) did this IPO?
UBS is lead.
There is no way Ferrari will ever make a 3 series equivalent... Should be interesting to see what happens to this company given the current formula 1 situation.
Whoops
Says who?
Just even mentioning a 3 series Ferrari competitor cheapens the brand for me. Why would an Olympian want to race a kindergartner?
If it's a luxury designer brand, then everyone should buy used and pay half of MSRP, rather than buy new from an authorized dealer.
Back to my rusty honda. (collection of US-made Joseph Abbouds bought used for $120 apiece in the back)
Agree with comments above, 0 chance they ever make anything close to a 3-series. I did read that they do want to increase production to 10,000 units though
Here is the SEC filing for anyone interested: https://www.sec.gov/Archives/edgar/data/1648416/000164841615000004/newb…
The company is selling a 10% stake, 10% will be held by Piero Ferrari (son of Enzo and Vice Chairman of Ferrari), and the remaining 80% will be spun out to existing FCA shareholders.
Gross margins of ~50% and EBITDA margin of 25% is pretty spectacular. As is over 400MM in revenues coming from sponsorship, commercial and brand related areas (lots of F1 sponsorship money here).
The only thing that scares me is over 10% of revenues going to capex every year (approximately half to R&D, the other half to PP&E). Although given the focus on F1 and related technology development for road cars, this is not entirely surprising.
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