Fiat-Chrysler launches at NYSE
October 13, 2014
Traded under the symbol FCAU (Fiat Chrysler Automobile), the company's new stock opened at $9 (7 euros) share in early trading Monday and quickly jumped to a high of $9.55 - a 6 percent gain. Later in the day, however, it had fallen below its opening price.
Fiat-Chrysler Chief Executive Sergio Marchionne said the stock market debut marked "the beginning of our journey as one global auto maker," adding that the listing was the "hard-won arrival at a destination."
FCA floated only a limited number of shares, however, under a plan that will eventually see the remaining stock of about 85 million shares sold after a road show later in the year.
In meetings with primarily institutional investors, Marchionne and Chrysler Chief Financial Officer Richard Palmer then explained how they want to improve the fortunes of the struggling carmaker.
In January, Fiat took full control of Chrysler in a step-by-step merger that began in 2009. The transaction is said to have saved both companies from bankruptcy, and has forged the world's seventh-largest auto maker by sales.
Ambitious plans
Once industry leaders in the US and Europe, both Chrysler and Fiat have lost market share in the past decade due to ineffective production and what consumers saw as a lack of innovative new models.
Richard Hilgert, senior analysts with ratings company Morningstar, told the Associated Press news agency that Chrysler had regained profitability in the US recently. But rising sales there were offset by Fiat losses in Europe, he added.
In May, Marchionne came up with an ambitious plan to develop new Chrysler Jeep and Fiat Alfa Romeo models in efforts to boost overall company sales from 4.35 million vehicles last year to 7 million by 2018. By comparison, world market leader Toyota sold close to 10 million cars last year.
FCA's stock debut is also intended to lower the combined company's debt of about $12.7 billion. Speaking to US business magazine Businessweek recently, Marchionne said that FCA could manage the turnaround alone. However, he also did not rule out seeking an additional partner.
"This is still a very fragmented industry for the level of capital you have to invest," he said, adding that the industry would need a carmaker bigger than Toyota.
uhe/cjc (dpa, AP, Reuters)