Ferrari’s IPO Priced At The Top Of Its Range – Eye Candy by Christopher Pavese, Broyhill Asset Management
While auto investors continue to ponder when used car prices will turn down, Ferrari’s IPO priced at the top of its range, giving the company a market capitalization approaching $10 billion. Zachary Crockett over at Priceonomics demonstrates why Ferrari owners have little cause for concern.
The most expensive car ever sold at auction, a Ferrari 250 GTO, went for $38 million in August of 2014 – one of only 39 Ferrari GTOs ever produced.
Of the 50 most expensive cars ever sold at auction, 30 are Ferraris.
According to the Hagerty Collector Car Index the majority of the market has stagnated. While German (BMW, Porsche, Mercedes-Benz), British (Bentley, Rolls Royce), and American (Ford GT) cars have stagnated, Ferraris have skyrocketed. In the last five years, the average “excellent” condition, vintage Ferrari to hit the auction block has nearly tripled in value.
Ferrari’s don’t pay dividends or cut deals with specialty pharmaceutical companies, but that’s one heck of a five-year run. And you can’t drive to work in your hedge fund.