Ferrari zoomed higher at the NYSE after pricing at the top of its expected range. It was a relief for the recently rocky IPO market. Bobbi Rebell reports.
Ferrari hit the road as a public company with a vengeance. Pricing at the top of its initial public offering range at $52 a share, and zooming higher at the start of trading on the NYSE. Ticker- RACE. The offering was limited to a ten percent stake, allowing parent company Fiat Chrysler to leverage the small amount of shares to drive the price higher. Renaissance Capital's Kathleen Smith, manager of IPO-focused ETFs. (SOUNDBITE) KATHLEEN SMITH, MANAGER OF IPO-FOCUSED ETFS, RENAISSANCE CAPITAL (ENGLISH) SAYING: "This will put money into Fiat Chrysler that is needed for expanding their production and then come January, all the rest of the shares that Fiat owns in Ferrari will be distributed to shareholders which we think may present another buying opportunity to own Ferrari if you think it is kind of expensive right now." Ferrari Chairman Sergio Marchionne, who also is Fiat Chrysler's CEO, promoted the offering as buying a stake in a luxury goods business. He aimed to get high trading multiples enjoyed by companies like Prada and Hermes. (SOUNDBITE) SERGIO MARCHIONNE, CHIEF EXECUTIVE OFFICER OF FIAT CHRYSLER AUTOMOBILES AND CHAIRMAN OF FERRARI (ENGLISH) SAYING: "When you look at the metrics that are associated with running this business, you'll realize that it has nothing to do with car making. The only thing they have in common is that they have four tires and a steering wheel." Smith says Ferrari's high price tag is a good sign for the IPO market. Investors have seen numerous recent IPOs flounder on their first day like First Data or be pulled altogether like Albertson's and Neiman Marcus.