Professor Elam

Thursday Oct 30 2014

Sergio Marchionne  CEO of Fiat Chrysler plans an IPO for Ferrari. . It could net one billion. 

We are studying equity in ACCT 3312 and in 3310. This is an excellent article which illustrates why one needs to understand equity terms. Here are some of the issues at stake. 

Luca Cordero di Montezemolo stpped down after 23 very successful years running Ferrari. He wanted to cap production at 7,000. Sergio thinks 10,000 wopuld raise gross profit to one billion. Will a 50%^ increase harm the brand?  Prices stay high with limited production.

Is it a car company or a luxury brand. Luxury brands carry higher multiples than car companies. I would say it is much more Rolex than Timex, don't you think?

Only 20% of Ferrari would be sold the other shares would be a property distribution to Fiat Chrysler shareholders. 

I don't think companies issue paper stock certificates any more. That's a shame, imagine what  Ferrari stock certificate might look like, real Financial Art I would say!