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FCAU plunged after Ferrari split

by Bill Cawthon on

Shares in Fiat Chrysler Automobiles (FCAU) dropped 37% on the Milan exchange in the first day of trading in 2016, after the company took out its Ferrari stake.

Even as Sergio Marchionne and John Elkann were ringing the opening bell to celebrate the addition of Ferrari (RACE) to the Italian exchange, FCA shares were already falling from an opening that was 31% lower than the last day of trading in 2015.

Ferrari-debut-on-Milan-Exchange-Web

According to figures obtained by Allpar from the Borsa Italiana, shares in FCA opened at about $9.68, closing at $8.83, down 37% from their $14.08 close on December 30.

On the New York Exchange, FCAU closed at $13.99 on December 31 and fell to $9.15 in after-hours trading. It opened at $8.91 and rose only to $9.00 by the end of the day — the lowest close since the company’s IPO.

The full import of the stock movement won’t truly be known until January 7, when FCAU owners get their shares of RACE (Ferrari) stock, at a ratio of 10:1. There will be no fractions given; if a person owns 55 shares of FCAU, they will get five shares of RACE, and the rest will revert to FCA, which will sell it. Each FCAU owner will also get one Europenny per share of stock.

Bill Cawthon grew up in the auto industry in the 1950s. His Dad worked for Chrysler and Bill spent a number of Saturdays down on the plant floor at Dodge Main in Hamtramck. Bill is also the U.S. market correspondent for just-auto.com, a British auto industry publication, and a member of the Texas Auto Writers Association, which has named the Jeep Grand Cherokee the “SUV of Texas” several times and named the Ram 1500 as the “Truck of Texas” two years running.

Bill has owned five Plymouths (including the only 1962 “Texan”), one Dodge and one Chrysler and is still trying to figure out how to justify a Wrangler. He also has owned at least one of every 1:87 scale model of a Chrysler product. You can reach him directly at (206) 888-7324 or by using the form.


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