Featured image courtesy of: FCAGroup.com
Ferrari, the luxury automobile manufacturer, began trading publicly on the New York Stock Exchange on Wednesday, October 21, 2015. The stock, trading under the symbol RACE, opened up at approximately $57 per share, higher than its initial public offering (IPO) price of $52 per share. Since then, optimistic investors have continued to jump on board and buy in, pushing the price up to $60 within minutes of release. There were several ups and downs throughout the day, but it closed at $55, still 6% higher than its projected price. Overall, Ferrari came off to a solid start, raising close to an astounding $900 million for its parent company Fiat Chrysler. Since breaking off and becoming independent, only a tenth of the company’s shares were put up for sale, with the remaining 90% split between Fiat Chrysler shareholders and Piero Ferrari, the son of Ferrari’s founder.
The reason for such a successful debut may be because of the brand’s history. Ferrari is known all over the world as a luxury reserved only for the wealthy. The fame associated with the car coupled with the thought of owning a piece of such a high-end brand attracted investors fairly quickly. Ferrari hit the ground running, but its future may not be so bright.
Despite steady growth over the last few years, production is limited to only 7,000 Ferraris in order to keep it as exclusive as possible. Additionally, the slumping Greek economy may affect its neighbors in the Eurozone, including Italy, where the company’s headquarters are located. In the end, it’s only a matter of time before we see whether or not Ferrari truly does race to the top.