Ferrari lives up to its heritage as shares race ahead in New York debut
Shares in Ferrari rose 15pc to $60 each in the Italian car maker's Wall Street debut on Wednesday after it priced its share offering at the top end of an indicated range as investors piled in for the ride.
Limiting the offering to a 10pc stake in the company helped parent Fiat Chrysler Automobiles (FCA) push up the value of the supercar maker, defying a choppy US market this year in which several big IPOs were discounted or delayed.
FCA raised $893m through the offering of 17.2 million shares in Ferrari at $52 each, the top end of a range of between $48 and $52, giving the company bearing the prancing horse emblem a stock market value of $9.8bn.
Proceeds may rise to $982m if a "greenshoe" option is exercised.
But the real excitement came when the stock started trading, and lived up to its RACE ticker code by surging 15pc to $60 each. Ferrari had pulled out all the stops to market itself to some of its cars' owners as well as Wall Street.
Ferrari Chairman Sergio Marchionne, also chief executive officer of Fiat Chrysler, has taken both companies' stories on the road in London, New York and Ferrari's home in Maranello, Italy.
The IPO proceeds will be used to help fund parent FCA's ambitious growth plan centered around the revamp of its Alfa Romeo, Jeep and Maserati brands.
A successful listing will bolster FCA's finances at a time when its calls for a merger partner have fallen on deaf ears. All proceeds from the Ferrari IPO will go to FCA, according to a regulatory filing.
The company's listing after several big New York IPOs were discounted or delayed.
Payment processor First Data priced this year's biggest public offering below its indicated range, Irish-owned Digicel pulled the plug on its planned listing citing volatility, while supermarket operator Albertsons Companies had to postpone its IPO the night before its shares were expected to start trading. Luxury fashion retailer Neiman Marcus Group has also delayed its IPO to 2016.
Ferrari's share sale has been in the works for about a year and is regarded as critical to help Fiat Chrysler finance a €48bn investment program focused on expanding the Jeep, Alfa Romeo and Maserati brands globally.
The public listing will eventually raise more than $4bn for Fiat Chrysler, thanks to additional cash the Italian-American manufacturer will squeeze out of Ferrari before spinning it off completely early next year.
Fiat Chrysler plans to distribute its remaining Ferrari holding to its own investors early next year.
Piero Ferrari, the son of the brand's founder, will retain his 10pc.
(Additional reporting by Bloomberg)