I was watching Bloomberg this morning when the Chief Executive of Fiat and Chrysler, Sergio Marchionne came out with this classic comment. “The Ferrari IPO will sell out quicker than I can eat a bagel!”. Well this begs the question, how quickly can Sergio eat a bagel? Can he eat one quicker than me? I do like Sergio, I think he is a shrewd businessman who really knows what he is doing indeed both Fiat and Chrysler are a good testimonial for this. I do now believe he has shot himself in the foot here. Ferrari is an elite brand with a strong history which goes back a long way. Their main products cars are an aspirational and expensive product with a long history of reliability problems. The business itself has also had a chequered history. I believe the IPO can sell well but I do predict a rocky ride for this stock as a long term proposition. Ferrari have said they will use the income to increase production. In truth if they are going to do that they need to also expand their product range. In the UK market that means more of these fantastic cars being driven around Surrey and Cheshire by chavvy footballers wives. This will cause a devaluation of the brand in my opinion. A Bloomberg analyst was asked if he would rather the car or the equivalent value in stock. I missed his answer but will provide my own answer to the question. The Car! If the folks from Ferrari are listening in could you make it an F12 Berlinetta in Red with tan hide, delivered soonest please 🙂 Ferrari are due to float in early July according to market reports.
Sunday, September 27, 2020