Thanks to its loyal following, Ferrari’s recent IPO was higher than it had originally been expected to be.
People wanting to get a piece of the luxury automaker quickly purchased the company’s newly offered shares. The shares that were available on the market only represented a 9.1% stake in the company.
The shares started at $52, which was the top end of its estimated $48 to $52 range.
Based on this IPO, Ferrari has a market capitalization of nearly $10 billion. The offering raised about $893 million for the company.
Ferrari has not yet commented on the success of its IPO.
Fiat Chrysler Automobiles (FCA) owns Ferrari. Fiat plans to use the money obtained from Ferrari’s IPO to revamp its Alfa Romeo, Jeep and Maserati brands.
The fact that Ferrari achieved major success in its IPO at the present time is quite a remarkable feat. Earlier this week, several other major IPOs were delayed or offered at a discount.
First Data Corp’s IPO went below its expected range. The supermarket company Albertsons was forced to postpone its IPO. Luxury fashion retailer Neiman Marcus also had to put its IPO on hold until 2016.
However, unlike those three companies, Ferrari is not trying to pay down debt. Only a small portion of Ferrari was offered on the market, and Fiat is only using the money to support its other brands.
Ferrari capitalized on the emotional resonance of its brand, as many people are enamored with the legendary automobile manufacturer. The company also targeted Ferrari owners, as many Ferrari drivers have stated that they received letters in the mail encouraging them to purchase shares of the company.
It goes to show that even when the market doesn’t appear favorable, a company that is widely seen as tremendously successful can still perform well. Ferrari took full advantage of its name and brand recognition to have an extremely fantastic IPO. If the company ever offers any additional shares, it is greatly expected that the public will gobble them up just as quickly.