Ferrari’s IPO raises £579.8 million – but will the bubble burst?

But as the day progressed, the prices for the share peaked at $60.97 (Rs 3,955.09), 17 per cent over the initial public offering, finally closing at $55.

Fiat Chrysler Automobiles (FCA), which owned a 90 per cent stake in the supercar manufacturing company, floated 9 per cent of the Ferrari’s shares at the New York Stock Exchange on October 21.

Ferrari’s IPO has seen returns above projections since sales began Wednesday on the New York Stock Exchange under the ticker “RACE”. That being said, Enzo Ferrari’s son Piero will continue to retain a 10 percent ownership stake in the company, leaving many hoping he’ll continue to steer the manufacturer in the right direction. This is a part of what will be a series of transactions to separate Ferrari from FCA and following the completion of this offer, FCA is expected to distribute its remaining 80% holding in Ferrari to its shareholders at the beginning of 2016. The move will see the amount of Ferrari stock that is publicly traded increase significantly. As a auto maker, Ferrari is really rather small, with annual output now limited to around 7000 cars, but it offers a lot of bang for its buck with a market value of around $10.4bn.

However, only long term investors in Ferrari or Fiat will be given preferential voting shares, which enables the Ferrari and Agnelli families to maintain effective control of the Italian carmaker. Cash from the Ferrari sale is to be used to fund a €48 billion investment to expand FCA’s Jeep, Maserati and Alfa Romeo brands.