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Old 09-28-2010, 05:09 PM   #1
SDCJ
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Default Report: Fiat may offer Ferrari share to boost stake in Chrysler

I'm surprised I haven't seen anyone on the forum discussing the recent news reports that have Fiat purchasing up to 51% of Chrysler by offering a Ferrari IPO. With many on this forum convinced that Fiat's intention in regards to Chrysler is disingenuous, I am curious as to your take on the reports.
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Old 09-28-2010, 06:02 PM   #2
XDCX
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SDCJ - Thanks for starting the thread.

I've only had a limited amount of time to spend on the Internet for the past few days and haven't had a chance to read beyond the headlines on this issue yet.

To the extent I've been huge a critic of the fact that Fiat doesn't have a single dollar of equity at risk I agree this could be a very positive development.

I'll add to my thoughts once I get a chance to do some more reading on the exact details.
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Old 09-28-2010, 06:05 PM   #3
crowe
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I would love to see them buy in.

“However, a Fiat spokesman denied the report, Reuters said. “There are no plans for any Ferrari listing,” the spokesman told the news service.”
http://dealbook.blogs.nytimes.com/20...-chrysler-buy/

I saw on Bloomberg where breakeven is $134 a share for the 300+ million shares of GM Uncle Sam owns.
I wonder how much the share price would be for Uncle Sam to breakeven on Chrysler.
I don’t look for the sale of either stock until after the election.
They both need to show true equity & net profit prior to any IPO.
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Old 09-30-2010, 11:53 AM   #4
CL Pgh
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Quote:
Originally Posted by crowe View Post
I would love to see them buy in.
X-2!!!

But spare me any smoke & mirror show… had enough of that chit from the last regime.
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Old 09-30-2010, 01:23 PM   #5
DealerEx
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Quote:
Originally Posted by CL Pgh View Post
X-2!!!

But spare me any smoke & mirror show… had enough of that chit from the last regime.
Ya'know... that word "regime" has always had a certain connotation...you almost always hear it used in conjunction with some third world government run by a dictator or some para-military group that loots the country's resources to line their own pockets. Ohhhhhh, wait a minute...I see where you're coming from....
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Old 09-30-2010, 01:32 PM   #6
XDCX
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Quote:
Originally Posted by crowe View Post
I would love to see them buy in.

“However, a Fiat spokesman denied the report, Reuters said. “There are no plans for any Ferrari listing,” the spokesman told the news service.”
http://dealbook.blogs.nytimes.com/20...-chrysler-buy/
OK, I'm still not fully up to speed on this story but I understand that Fiat is denying they have any current plans to issue an IPO if Ferrari.

That said, have there been any other statements about Fiat's desire to own 51% of Chrysler? In my opinion that's the real story and the issue the reporters should be trying to verify or deny.
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Old 09-29-2010, 06:01 AM   #7
Ralph
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When I first saw that story I was going to post something about it, but upon further reading, it seemed that Fiat was completely denying the story. I tried to look at it from a logical standpoint.

In the end of Daimlers career with the company, they paid $650,000 million to Cerberus to get rid of Chrysler. The reason they couldn't get any better deal was the un-funded UAW pension liabilities they're saddled with. Then Cerberus immediately went round the world trying to slice and dice the company, willing to sell off any bits they could...with no takers. Feingold, Feinberg...whoever he is, apparently offered the treasury Chrysler for a buck, if they'd take it off his hands.

Now Fiat has control of the keys to the product cabinet for free. Although they can't make anything on the company through profits till the Feds are paid off, they can take anything and everything not nailed down. I'm not sure what they'd benefit from buying into the company, since they can't profit until god knows how many billions are repaid. In light of recent history I'm not sure I can see anyone putting actual cash money into Chrysler other than the government.

Now, if there's a deal somewhere whereby if they own 51% they're off the hook with the government bailout funds...then I can see far in the distance, a foggy picture of why it would make sense.

Bottom line, if it's true I think it means good things for Chrysler. That'd say to me, someone other than the endless deep pockets on the other end of the IRS, feels they're worth more alive than dead. If Fiat were putting their own money into Auburn Hills that would be a big deal. Whether or not the taxpayers get paid back is all together another story. But at face value, seems pretty far fetched to me.
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Old 09-29-2010, 06:51 AM   #8
steve_biegler
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Like Ralph said, Fiat can't profit until the feds are paid off. Do you suppose this has anything to do with starting a new dealer group for fiat and probably Alfa, instead of giving the product to the current dealers. Just a thought.
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