What’s Ferrari Worth? Try USD$11 Billion… Photo:

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Tim O'Brien | Jul, 05 2015 | 4 Comments

When Fiat Chrysler Automobiles NV floats Ferrari later this year, the public float is expected to value the Ferrari SpA supercar brand at more than €10 billion, or US$11 billion.

That's more than half the €16.6 billion total market capitalisation of FCA (which includes the Ferrari brand); valuing Ferrari at more than Fiat, Chrysler, Alfa Romeo, Jeep and Dodge combined.

But none other than Fiat Chrysler boss of bosses, Sergio Marchionne himself, made the claim when speaking at the reveal of the new Fiat 500 in Turin.

The initial public offering (IPO), now scheduled to be listed on the New York exchange on October 13 this year, would value the supercar-maker at “at least” €10 billion, Marchionne said.

“There are clear expectations from ourselves as (the) Ferrari brand is unique,” he said. “There is also a scarcity value as we are just selling a 10 percent stake.”

That "scarcity value" means that it may not be prudent to quit your current portfolio for the chance to ‘buy in’ to the prancing horse; the 10 percent on offer to the market won’t be easily bagged.

As to the remaining 90 percent, FCA plans to distribute an 80 percent stake to Fiat Chrysler investors, and Piero Ferrari, son of Ferrari patriarch and founder, the late Enzo, holds 10 percent and plans to hang onto it.

What is Ferrari worth? With the Chinese economy coming off the boil – and with share values plunging there in one of Ferrari's most important markets – the €10 billion prediction by Marchionne may be on ‘the upper side’ of expectations.

Marchionne, of course, may simply be ‘talking up the market’; FCA has a €48billion investment plan to fund – and quickly.

Its stated goal of building and selling seven million cars annually by 2018 will require a massive injection of capital.

And when there’s a cash-cow like Ferrari waiting to deliver the milk, Marchionne is naturally keen to slip a bucket under it and squeeze it for every drop.

Maybe Marchionne is right; whatever, it is going to be one hell of an interesting float.

MORE: Ferrari News and Reviews

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