In a debut that's accelerated the company's growth, Ferrari NV has climbed up to an incredible 17 percent after its initial public offering - the first step in Fiat Chrysler Automobile NV's plans to spinoff the car maker to finance its expansion plans.
The shares traded as high as $60.97, and were up 9.5 percent to $56.96 by 10:30 in the morning. The stock opened with a price of $52, the top end of the marketed range. Fiat Chrysler used a 9 percent stake limit on the public listing to keep demand high, according to Bloomberg Business.
"The strategy demonstrates an understanding of what drives many investment decisions," said Meir Statman, professor of finance at Santa Clara University and author of "What Investors Really Want."
A row of more than a half a dozen Ferraris were parked on Wall Street, including a classic 1961 Ferrari and a race car. Two Detroit-made Dodge Durango SUVs were also parked alongside the higher-priced Ferraris. A big Ferrari banner hung on the front of the exchange along with the Ferrari, U.S. and Italian flags. Some traders wore red Ferrari baseball hats. The scene looked more like a Ferrari exhibit than the Stock Exchange, as the Ferrari faithful were in full gear.
The company will sell another 1 percentage point stake, or 1.7 million shares, if there is enough demand. The other 10 percent is owned by Pietro Ferrari, the son of the company's founder, according to The Detroit News.
The shareholders of Fiat Chrysler and Ferrari will get 80 percent of the remaining shares when the spinoff is completed next year.
"The utilitarian benefits of a Ferrari are no different from those of a Toyota," Statman said. "Both will take you from home to work and back. But Ferraris yield expressive and emotional benefits that Toyotas cannot match."
"A 70-year old in a Toyota is old, but a 70-year old in a Ferrari is young," he added.
Shares in Maranello, Italy-based Ferrari are expected to start trading on Wednesday and list on the New York Stock Exchange under the symbol "RACE," according to Reuters.
