FORUMula1.com - F1 Forum

[CookinFlat6]

Just a few snap quotes from grown ups to illustrate what grownups understand to be the scope of possibilities opened up by this well trodden corporate finance deal

From CNBC http://www.cnbc.com/id/102132948

Of course, another big car company—like BMW or Volkswagen—could come in and buy the shares or all of Ferrari itself. BMW could use an Italian flag in its sports lineup to better compete against VW's Lamborghini and Bugatti. And some Middle Eastern, Russian or Chinese billionaire could even team up to buy all of Ferrari someday.

http://www.evo.co.uk/ferrari/14634/ferrari-to-split-with-parent-company-fiat-chrysler

What are your thoughts? Could the split help to ensure Ferraris of the future remain focused supercars or will we just see a vast expansion of Ferrari fragrances?...

The economist

But splitting Ferrari apart from FCA makes sense. One is a mass-market carmaker and the other a luxury brand that makes huge profits partly by selling merchandise—around a fifth from selling baseball caps and the like emblazoned with Ferrari’s prancing horse.

Certainly, it’s unimaginable that Ferrari would lose its Italian factory. But an American listing would mean that Ferrari would develop an American shareholder base, even if the Agnellis, who own 32 per cent of FCA through their family holding company, hang on to their Ferrari shares. And American shareholders, probably more so than shareholders from other countries, might demand ever-rising quarterly earnings, meaning shareholder returns might take precedent over the performance, quality and exclusiveness of the product itself (Ferrari limits production to about 7,000 sports cars a year, carefully maintaining a two-year waiting list).

The way I read it..... FCA own 90% and it states "A total of 10 per cent of FCA's interest in Ferrari will be offered to public investors. The remainder will be distributed among FCA shareholders" In which case it's given up 90% of Ferrai's shares. Therefore going forward anyone company can start buying up shares until they get to 51%, just like pension companies were buying up post office shares from indivduals. I may have read it wrong but at the end of the day 90% of Ferrari shares will be floating around.

Pierre Lassonde, chairman of Toronto gold royalty company Franco-Nevada and an avid owner of Ferraris – his latest is the Ferrari 458 Italia, red of course – does not necessarily think a U.S. stock market listing will damage the company’s brand. He thinks Ferrari has been doing that all by itself through losses on the Formula One circuit. “The product image is really, really tied to the success of the F1 races,” he said. “But they’re not winning races.”

So 10% of Ferrari is still owned by Ferrari Blood. 10% will be issued for public sale which is bound to raise a an over-inflated amount of funds for that small 10% (every rich Ferrari Fan will want a piece). Then the remaining 80% will be distributed between a selective number of shareholders within in FIAT. So if the 80% want to sell to public or sell back to ferrari or even VW that's where the infighting begins. I'd assume son of Ferrari would probably have first refusal on the shares. This could be disastrous for Ferrari or very lucrative for BMW Ferrari?! Maserati is now a FIAT ambition and Alfa isn't really worth mentioning as last time Alfa were really related... Enzo Ferrari was a youthful man.

I cant be bothered with more, if the above doesnt show how puerile and childish it is for someone to declare 'its not this, its that' or 'Fiat wont do this' without even half of a clue how the grownup world works. But like the shareholders are unlikely to value romance over hard cash, we are expected to put up with halfbaked rocking horse poo lest we hurt someones investigative journalistic feelings

next anyone who says algae cant power cars, emit carbon AND extract an even bigger amount all at the same time - must be a naughty troll because they dont allow others to state their uneducated opinions as fact

[sagi58]

... I think it's time for me to move on and post elsewhere, where I can express an opinion without being ridiculed because some others don't share my opinion.

There are many individuals here who do respect and appreciate your opinion without ridicule.

[spankyham]

My next bit of free killer F1 anaylsis - Hammer must replace Spankee at once

:clap: yes well done Cookie! Bang on the money once again

I don't know if I can take any more of this unbridled love and admiration

So, hammer, your master has spoken, you must replace me as the biggest Ferrari fan here at Forumula1 at the same time as admiring and deeply respecting Fernando as a person and driver.

[CookinFlat6]

My next bit of free killer F1 anaylsis - Hammer must replace Spankee at once

:clap: yes well done Cookie! Bang on the money once again

I don't know if I can take any more of this unbridled love and admiration

So, hammer, your master has spoken, you must replace me as the biggest Ferrari fan here at Forumula1 at the same time as admiring and deeply respecting Fernando as a person and driver.

The case was tried, evidence presented, the public voted - 56%

Now the poll is locked - we can always refer to that result as gospel in the future

Basically, in democratic terms - you are as legitimate as Kim Jong Un - FACT

I wonder if they mine rare earth in North Korea

[CookinFlat6]

It's seems that it's not 'spankyham' having difficulty responding, it's me suddenly unable to reply directly

Might have to change the iPhone

[spankyham]

.... but it's unlikely that FIAT will allow anyone to get a controlling 51% stake in Ferrari

I agree MOA that Fiat don't want this, but I feel they have competing interests. That want to retire debt most of all while keeping their global sales growth objectives alive.

[Hammer278]

My next bit of free killer F1 anaylsis - Hammer must replace Spankee at once

:clap: yes well done Cookie! Bang on the money once again

I don't know if I can take any more of this unbridled love and admiration

So, hammer, your master has spoken, you must replace me as the biggest Ferrari fan here at Forumula1 at the same time as admiring and deeply respecting Fernando as a person and driver.

Lol....major reading comprehension issue. RC wasn't even responding to that part of Cookins post.

Quit being such a sensitive little 8y old, and start acting like a moderator for a change.

[racechick]

My next bit of free killer F1 anaylsis - Hammer must replace Spankee at once

:clap: yes well done Cookie! Bang on the money once again

I don't know if I can take any more of this unbridled love and admiration

So, hammer, your master has spoken, you must replace me as the biggest Ferrari fan here at Forumula1 at the same time as admiring and deeply respecting Fernando as a person and driver.

You can stop these little games right now. I was referring to Cookie pre guessing that Fiat would sell off Ferrari. And that would have been obvious had you quoted the whole post instead of cutting out bits as you did. Cookie has been right on a lot of things he's predicted, this was the latest. So don't twist my words!

[Hammer278]

Well said RC. I actually gave spanked the benefit of the doubt and put it down to a reading delinquency.

Seriously spanked, insulting me by calling Cookin my master, twisting facts to sound knowledgeable on topics you know basically nothing about, insulting Cookin for pointing out your lies and mistakes, and now misquoting another moderator's posts.... does the word 'dignity' mean anything to you.

Anyway, to keep this on topic....wait, is there anything else to say reg this topic? Maybe when Ferrari start putting their F1 cars up on E-bay?

[CookinFlat6]

I think he is upset that only one person on the whole forum agreed with him and so he wants to twist things and upset other people in the hope his 'performance' is forgotten

One would think the Tifosi should be more concerned with the eminent change of role for them, from blindly cheering an f1 team to cynically selling fragrances, handbags and plastic toys

[What's Burning?]

Some real data about where the profit is coming from.

If you’re wondering how Ferrari manages to grow profits while selling fewer cars, all while continuing to invest in new products and an extensive motorsport program, there are actually several reasons.

Most of the revenue growth has been brought about by the increased rate of personalization done on the cars, such as via the Tailor-Made Program and Special Projects division. Ferrari has revealed that every car it sold in 2013 featured some kind of personalization, which can often be quite costly.

Also growing this year was Ferrari’s restoration division, Ferrari Classiche, as well as its Corse Clienti customer racing program, which was recently merged with the Formula One program through the new Sporting Activities Department.

Finally, Ferrari has also revealed that revenues from its brand-related activities, such as merchandizing and its theme park license, also hit a new record, coming in at 54 million euros ($74.3 million) for 2013, which was up 3.6 percent on the previous year’s result.

The more powerful the brand, the less important the cars become. It's been that way for quite some time and FIAT recognizes this. The amount of money made by selling Ferrari cars is limited because it's the exclusivity that keeps the brand inaccessible to most. What is accessible is the accessorizing. So how does a business make money from an intangible? When it can't sell more cars which is the direct route to real higher profits? FIAT is unlocking money that is locked in this intangible by spinning off the marque. It's a tried and true method that's been done by countless corporations before. AT&T spinning off the fabled Bell Labs into what became Lucent back in the 90's is a perfect example of this. Where is Lucent today? Meanwhile AT&T pockets a large short term sum of cash that allows them to pay off debt, expand the core business and buy back their own shares further saving on the cost of paying dividends.

The most likely outcome of this announcement is that "Ferrari" will become more and more beholden to stock pricing and share valuation and with every corporation the line is to do more with less, never to do more with more. Cost, spending, and ROI of the F1 program will be scrutinized without the impervious bubble created by the FIAT parent.

Elsewhere on the internet the announcement was being berated as OMG clickbate!!! It's not a "sale"!!! and that FIAT will never let go of the brand, while completely missing the implications and what's important to understand. FIAT will no longer have anything to do with Ferrari. The current FIAT stock holders will be given their percentage of Ferrari stock but... There is no more association, Ferrari will live and die on its own and any company that offers more money for a stock than what that stock is valued at will in fact have a real chance of buying a majority share and therefore control. This has nothing to do with passion or the F1 team or how many races Schumacher won or that Enzo was a great influence in the history of the sport. Stockholders do not give a crap about any of that.

The issue is (and this is not only a Ferrari issue as the McLaren diehards do it just as much) that any explanation of the business reality is seen by them as coming from an iconoclast positioned attack.

Some people come to forums wanting only to say nice things and read nice things, that's fine but don't get offended by what others that obviously know more than you are saying only because you happen not to like what's being said. I'd rather get content and information from my forum activity and I don't get offended when I learn something even if I don't like the information.

Ignorance is indeed bliss.

[CookinFlat6]

That's the most eloquent, spot on, yet diplomatic post I have so far read on this forum

Much better put than my own 'monotonous dribble' and hopefully will be read by some without the knee jerk reaction against the truth or against things not easily understood

[darwin dali]

That's the most eloquent, spot on, yet diplomatic post I have so far read on this forum

Much better put than my own 'monotonous dribble' and hopefully will be read by some without the knee jerk reaction against the truth or against things not easily understood

It was still long though.
WB, can you put it into bullet points form for me?

[CookinFlat6]

He might have to stick a picture of Flavio in at the same time