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Ferrari Prepares For IPO, Places Shares at $52

Ferrari Prepares For IPO

Luury carmaker, Ferrari, has priced its IPO at $52 a share in preparation for its official announcement of the public offering.

Ferrari Prepares For IPO, Places Shares at $52

Unnamed insiders revealed that demand for the shares was incredibly high and overly subscribed.

Ferrari is planning the launch of the IPO this coming Wednesday 28.

The $52 price is at the higher end of the $48 to $52 range that was earlier indicated. This pricing gives the luxury carmaker a market capitalization of about $9.8 billion

Ferrari is floating about 17.8 million shares as part of the planned IPO. These shares represent an estimated 9 percent of the company’s shares. So far, the carmaker has raised up to $900 million in public capital.

Not too ambitious

It is reported that company officials and underwriters were keen on pricing the IPO at $53 late on Monday soon after the investor books closed.

However, in a last minute meeting held late Tuesday afternoon, company official decided not to sell the IPO at too high a price. This would show investors that the company was prudent with its financials.

The decision to set the price at $52 was also a strategic decision to allow for a rise on the IPO’s first day of trading.

In financial year 2014, Ferrari shipped 7,255 cars, and generated 2.8 billion euros in net revenue and 295 million euros in profits.

The Ferrari family has 10% ownership while Fiat Chrysler, the Italian-American carmaker, own 90% of the remaining shares of the company. After the IPO, Fiat Chrysler’s ownership will reduce to 80%.

The deal is intended to completely separate Ferrari from the Fiat Chrysler brand. Fiat Chrysler has plans underway to transfer its 80% stake to its shareholders but Ferrari will not receive proceeds from this sale, according to the information provided in the IPO prospectus.

Ferrari's ticker symbol on the New York Stock Exchange (NYSE) is set as RACE.

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