Luxury sports carmaker lists on New Yorks Stock Exchange with stock price rising 7% in early trading, putting company value at $11bn

Ferrari shares got off to a flying start when the luxury Italian sports car company, founded by motor racing driver Enzo Ferrari in 1929, floated on the New York Stock Exchange on Wednesday.



Shares in the company, which listed under the stock ticker RACE, spiked 17% from its initial public offering price when the market opened before settling 7% higher, at $55, valuing the prancing horse at just over $11bn (£7bn).

Eight Ferrari sports cars, including the current Formula One car and the new 488 GTB model, were lined up outside the stock exchange as Piero Ferrari, Sergio Marchionne, CEO of Fiat Chrysler, and Ferrari chief executive Amedeo Felisa rang the opening bell.



Marchionne, who was wearing his trademark black sweater rather than a suit jacket, sought to reassure Ferrari lovers that the IPO was not the first step to mass production.

“What is at the heart of the brand is this intimate relationship between us and the customer base,” he said. “Therefore it would be almost suicidal to try to expand volumes to the detriment of that relationship.”

Fiat Chrysler, which owns 90% of Ferrari, floated 9% of the company and plans to sell the rest of its stake over the next year. The share sale is critical to help struggling Fiat Chrysler finance a revamp of its Alfa Romeo, Jeep and Maserati brands.

Piero Ferrari, Enzo’s son, will retain his 10% of the company, which was worth $1.1bn on Wednesday.

Michelle Fleury (@BizFleury) You'd think something was going on here today... #FerrariIPO pic.twitter.com/VIzlCNaVgC

The company embarked on a months-long roadshow before the sale to tap interest from retail investors and Ferrari owners, some of whom said they got letters this summer inviting them to buy company shares once it listed.

“A classic Ferrari is a better investment than the stock, but I still plan on buying shares,” David Radeloff, who has owned a number of the cars, told Reutersbefore the offering.

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.

“The utilitarian benefits of a Ferrari are no different from those of a Toyota,” he 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.”