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Ferrari to make roaring Wall Street debut

October 20, 2015

The drool-inducing sports car maker is racing towards what could become one of the biggest IPOs of the year. Analysts say keeping shares exclusive could help fuel demand and boost the company's value.

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A Ferrari on display at the 16th Shanghai International Automobile Industry Exhibition.
Image: Getty Images/Johannes Eisele

Shortly before the legendary sports car producer makes its Wall Street debut, the scramble to secure a stake in the Italian thoroughbred is already exceeding expectations.

The hotly anticipated share, which will fittingly be traded under the stock name RACE, was widely expected to be offered in the $48-$52 (42-46-euro) range. But insiders say the initial public offering could be priced as high as $53 per share, according to CNBC. That would be $15 higher than Facebook's IPO when it started trading in 2012, and $27 higher than Twitter's when it debuted in 2013, but still a far cry from Chinese e-commerce giant Alibaba's $68 offering, which went down as the largest IPO in history.

Historic opportunity

For avid fans, Wednesday marks a once-in-a-lifetime opportunity to own a small piece of the cult car, conceived in the Northern Italian town of Maranello in 1947 by former race driver Enzo Ferrari.

"I will probably never be able to afford a Ferrari, but if I manage to buy some shares, I could at least say I'm part of the Ferrari story, something Italian that you can be proud of," Alessia Scipione, a 38-year-old translator from Pescara, central Italy, told Reuters.

Keeping it exclusive

But with just 10 percent of the company on offer, analysts say demand far outstrips supply. Italian-American owner Fiat Chrysler hopes this could help push the value of the brand past the $10-billion mark.

Experts have praised Chairman Sergio Marchionne's decision to keep the offering exclusive, reflecting the tried-and-tested strategy Ferrari has also deployed with its cars, and which has helped fuel the legend surrounding the brand. The company shipped just over 7,000 new cars last year, and that number's expected to increase to no more than 9,000 by 2019. In comparison, rival Porsche delivered close to 190,000 in 2014.

The IPO is key to Fiat Chrysler's plans to expand its global market share. By injecting $48 billion into the development of its other brands - especially Alfa Romeo, Jeep and Maserati - the owner aims to increase sales to seven million vehicles per year.

The listing will leave Fiat Chrysler with around 80 percent of Ferrari, which the parent company intends to spin off completely by the beginning of next year.

pad/hg (AP, AFP, Reuters)