Corner of Berkshire & Fairfax Message Board

General Category => Investment Ideas => Topic started by: LC on September 12, 2012, 10:49:19 AM

Title: FCAU - Fiat Chrysler Automobiles
Post by: LC on September 12, 2012, 10:49:19 AM
Interesting writeup on Fiat done by Greenwood:

http://www.gwinvestors.com/Main/Blog/Entries/2012/8/24_Fiat_SPA__Love_For_Sale_files/Fiat%20SpA%20Love%20For%20Sale%202012.08.24%20v2.pdf
Title: Re: FIATY - Fiat S.p.A.
Post by: DCG on September 13, 2012, 02:46:34 PM
Posted this in my 'Auto Manufacturers' thread as well, but I opened a position in FIATY yesterday. It looks super cheap to me.
Title: Re: FIATY - Fiat S.p.A.
Post by: jmaes on September 13, 2012, 03:00:37 PM
You also might want to consider Exor (www.exor.com). They hold 30% of Fiat and 30% of Fiat industrial + some other investments. The Mackenzie Cundill funds own it, and Bestinver also owns it.
Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on September 13, 2012, 05:51:20 PM
You also might want to consider Exor (www.exor.com). They hold 30% of Fiat and 30% of Fiat industrial + some other investments. The Mackenzie Cundill funds own it, and Bestinver also owns it.

I myself am long exor. They seem to actively manage value, f.e. by separating Industrial from Fiat group and the Chrysler deal seems to have been on very good terms.

Because they hold other assets and are levered on the liability side of the balance sheet as well, any upwards movement by Fiat will translate into similar nav gains as holding fiat directly. Also, the exor stock is trading at significant discount to nav (historically they trade with a conglomerate discount, just not that severe), so you get and undervalued stock within an undervalued holding company.

(http://sportgamma.files.wordpress.com/2012/01/simplemaths.jpg)

There is a heap of reports on the borsa italia website: http://www.borsaitaliana.it

Exor
- http://www.borsaitaliana.it/mediasource/star/db/pdf/87267.pdf

- http://www.borsaitaliana.it/borsa/azioni/documenti/societa-quotate/studi-e-ricerche.html?search=Y&lang=en&tipology=null&company=149&sender=null&docDate=&day=&month=&year=&numDoc=

Fiat
http://www.borsaitaliana.it/borsa/azioni/documenti/societa-quotate/studi-e-ricerche.html?search=Y&lang=en&tipology=null&company=125&sender=null&docDate=&day=&month=&year=&numDoc=

Fiat Industrial
- http://www.borsaitaliana.it/borsa/azioni/documenti/societa-quotate/studi-e-ricerche.html?search=Y&lang=en&tipology=null&company=1188&sender=null&docDate=&day=&month=&year=&numDoc=
Title: Re: FIATY - Fiat S.p.A.
Post by: jmaes on September 14, 2012, 01:55:11 AM
There is a heap of reports on the borsa italia website: http://www.borsaitaliana.it

Exor
- http://www.borsaitaliana.it/mediasource/star/db/pdf/87267.pdf


From the link above p.19 it seems like the preferred and savings shares are more interesting than the ordinary.  The only difference is that they are non-voting shares, have a higher dividend, and lower liquidity. As a result they often trade at a lower price than the ordinary shares.
Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on September 14, 2012, 04:51:49 AM
There is a heap of reports on the borsa italia website: http://www.borsaitaliana.it

Exor
- http://www.borsaitaliana.it/mediasource/star/db/pdf/87267.pdf


From the link above p.19 it seems like the preferred and savings shares are more interesting than the ordinary.  The only difference is that they are non-voting shares, have a higher dividend, and lower liquidity. As a result they often trade at a lower price than the ordinary shares.

I think you´re mistaken. From what I remember the preferred and saving shares will be converted into common the same way they did with Fiat. I´ll try to find the document later today.
Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on September 14, 2012, 09:34:00 AM
I was mistaken. Exor has not announced anything about converting preferred and saving shares into ordinary. What I read was a passage in a report from Cheuvreux:
"In our view, the simplification of the holding structure would be the best
way for Exor to shrink the holding discount. The planned cancellation of
FIAT/FIAT Industrial non-voting shares could be the first step in this
direction. We believe a similar deal for Exor would have a beneficial
impact on the cost of capital, reducing dividend commitments."

However, if a mandatory conversion were to happen, it will most likely not be on a 1:1 basis. In the case of Fiat Industrial the conversion was as stated:
"...at the Extraordinary General Meeting held 5 April 2012, Fiat Industrial shareholders approved a resolution
for the mandatory conversion of preference and savings shares into ordinary shares at a conversion ratio of
0.700 ordinary shares per preference share and 0.725 ordinary shares per savings share;"
http://www.fiatindustrial.com/en-US/investor_relations/advices/FiatDocuments/Annuncio%20La%20Stampa_Fiat%20Industrial_135x420_ENG.pdf

In the case of Fiat the conversion rate was higher:
"preference shares will be converted into newly issued ordinary shares according to a conversion ratio of 0.850
ordinary shares for each preference share;
n savings shares will be converted into newly issued ordinary shares according to a conversion ratio of 0.875
ordinary shares for each savings share."
http://www.fiatspa.com/en-US/investor_relations/shareholders/FiatDocuments/Punto5_AssemblAzion_UK.pdf

Title: Re: FIATY - Fiat S.p.A.
Post by: jmaes on September 14, 2012, 02:20:03 PM
Thanks for the update,

I found indeed those conversion rates for Fiat, but couldn't find anything for Exor.
Title: Re: FIATY - Fiat S.p.A.
Post by: DCG on October 03, 2012, 01:53:03 PM
Chrysler September sales up 12% from last year while Ford and GM sales were flat:

http://www.usatoday.com/story/driveon/2012/10/02/chrysler-general-motors-gm-ford-us-september-sales/1607997/ (http://www.usatoday.com/story/driveon/2012/10/02/chrysler-general-motors-gm-ford-us-september-sales/1607997/)
Title: Re: FIATY - Fiat S.p.A.
Post by: jch548 on October 03, 2012, 07:09:13 PM
I'm pretty bullish on Fiat also. There are a number of catalyst that could move the shares substantially higher. Just hitting Marchionne's profit margins for Chrysler could double the shares. Still, Fiat needs to gain 80% control of Chrysler before they can go after their cash flows. I'm wondering if Fiat will need to ask for government assistance in Italy if they bleed for another year.
Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on November 10, 2012, 03:10:24 PM
From the 3q report of Third Avenue:

Quote
To put it somewhat bluntly, if shareholders must
pay the insiders of holding companies (through their
operating costs), the pay should at least be justified by valueadded
contributions made by those insiders.
Making matters worse, inertia or inaction can take a toll on
shareholder returns that greatly exceeds operating costs. To
illustrate an example of this, we point to a tale of two
European automobile manufacturers, French Peugeot S.A.
(“Peugeot”) and Italian Fiat S.p.A. (“Fiat”). Peugeot and
Fiat share many similarities: both companies are controlled
by holding companies (note: neither of which are held in
the Fund), operate in a very difficult industry that faces
formidable headwinds in the continental European mass
market, have relatively weak competitive positions outside
of Europe, and had generally been long-time beneficiaries
of strong local banking relationships and supportive local
governments. Not surprisingly, the global financial crisis hit
each of these companies particularly hard and exposed them
as not competitive enough on a global scale.
In the depths of the financial crisis, Peugeot’s holding
company remained passive, to our knowledge taking few (if
any) truly aggressive actions to confront its challenges. On
the other hand, Fiat’s holding company, Exor S.p.A.
(“Exor”) has been far more aggressive. Sergio Marchionne,
hired by Exor to be the CEO of Fiat, structured the
acquisition of Chrysler in what we see as a very clever and
opportunistic deal designed to address Fiat’s exposure to the
long-term problems facing the European auto market. In
addition, Exor also oversaw the 2011 de-merger of truck
and agricultural equipment maker Fiat Industrial S.p.A.
from Fiat (Auto), and eliminated the multiple share class
structure at each. Cost cutting at Fiat has been impressive,
helping the carmaker (even excluding Chrysler) remain
modestly profitable in the current environment, while
Peugeot is suffering substantial losses.
The resulting difference in stock price performance has been
astounding; from March 31, 2009 through July 31, 2012,
Fiat common stock generated a total return for shareholders
of over 80%, while Peugeot produced a negative total
shareholder return of -47%2. We provide this example as an
illustration of how important proactive versus passive
management tends to be to the performance of holding
companies and their subsidiaries. Shareholders of Peugeot’s
holding company have suffered as a result of its inactivity
amid crisis, while shareholders of Fiat’s holding company
have benefitted from their bold actions.

Of course, taking bold actions can be as harmful to
shareholder returns as they have been helpful in the case of
Fiat; a controlling shareholder that takes aggressive, but
foolish, action could do much more harm than a passive
controlling shareholder. To that point, another of the softer
factors to be weighed in assessing the investment
attractiveness of a holding company is the nature of its
investment activity, principally the quality of the purchase
and sale decisions made by management. Considerable
wealth for shareholders can be, and is, created by shrewd
resource conversion activities.

On page 30:
http://www.thirdave.com/ta/documents/sl/TAF%203Q%202012%20Report%20and%20Shareholder%20Letters.pdf
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on November 10, 2012, 05:44:50 PM
Marchionne is impressive. I have been hearing his conference calls and interviews, and is truly smart and opportunistic. After reading "Once upon a car" and the way he jumped into the Chrysler restructuring… and became the government's only option… the Jamie Dimon of the car industry.

http://www.cbsnews.com/video/watch/?id=7403188n

Fiat however faces headwinds and Marchionni needs some lucky breaks to stabilize the turnaround.

https://twitter.com/PlanMaestro/status/263371053739417601
Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on November 15, 2012, 04:15:12 AM
The exor/fiat chairman, John Elkann is an interesting figure:

Special Report: At Italy's Fiat, young scion steers tough course
Quote
He was born in New York in 1976 to Margherita Agnelli, daughter of family patriarch Gianni, and Alain Elkann, a journalist from a prominent French Jewish family. His parents split when he was five and his mother remarried and started a new family. By the time Elkann was 14 he had five new siblings, in addition to the two from his mother's first marriage.

Elkann lived in Britain and Brazil before attending high school in Paris. (He speaks four languages.) His limited boyhood experience of Turin was summer visits to his grandparents, who lived in a hilltop villa. In 1994 he enrolled in Turin Polytechnic, eschewing his grandparents' elegant home to live in a dormitory room with a shower but no private toilet.

"It was a good sign of accepting an almost military attitude of effort," says a former Fiat manager, who asked not to be named. "He showed he could adapt."

Two years later Elkann went to the British Midlands to work at a Fiat-owned headlight plant, staying with an English couple who had no idea their lodger was an Agnelli heir. Elkann usually ate dinner from a tray in front of the television, sitting next to the family dog.

In December 1997 Elkann's cousin, Giovanni Alberto Agnelli, who was being groomed to run Fiat, died of cancer. Elkann was named in his stead to Fiat's board and designated, at age 22, as heir to the controlling stake. Other company-family traumas followed. In 2002 Fiat nearly went bust. In 2003 Gianni Agnelli died, followed by Elkann's great-uncle Umberto Agnelli in 2004.
http://www.reuters.com/article/2012/11/09/us-fiat-elkann-idUSBRE8A80BB20121109

Unlikely heir who saved the family jewels
Quote
However, drawing from the lesson of his Birmingham experience, he has not kicked back and done nothing, as many analysts thought he might. Mr Elkann brought in Sergio Marchionne, Fiat’s thrusting chief executive, and gave his blessing to dilute the Agnelli family stake in order to pave the way for the company’s takeover of 20 per cent of Chrysler in 2009, and a later demerger of the group. These deals were unthinkable for previous generations and even other European carmaking families, such as the Peugeots and the Quandts behind BMW.

The Agnelli family has reaped the rewards in the subsequent share price rise. And, in recent days, Mr Elkann has taken full control of the family investment company, a firm with €9bn ($12.6bn) in net asset value and more than €1bn of investment firepower, with the intention of making it into a kind of Berkshire Hathaway for the capital goods industry. He wants to expand into the US and Asia.
http://www.ft.com/cms/s/0/0693507a-4830-11e0-b323-00144feab49a.html#ixzz2CI8BGM9C

Interview with Gianluigi Gabetti
Quote
But Agnelli believed in the dynasty…

GG: He definitely wanted one of his descendents to lead Fiat. And that is what happened. After the death of Giovanni Alberto Agnelli, he chose John Elkann as his successor and personally prepared him for the job.

He kept him near at home, and introduced him to me and I, in turn, observed that the young man showed a strong interest and had the ability to work hard.

We were together for a few years, until I thought the time was ripe to restore to the family the responsibility that I had received, and I retired with a clear conscience.

Does John Elkann believe in a Fiat controlled by the family?

GG: There is a strong desire of continuity and the family is closer than ever.

What about Marchionne, with his edgy style that angers the labor unions, the politicians and now even Volksawagen?

Umberto Agnelli wanted him on the Board of Directors of Fiat, John Elkann and I chose him to take the place of Giuseppe Morchio, who did not want to be limited to the role of managing director.

We have become fast friends, Sergio and I, we spend hours together and I have discovered his genial side. I can only hope that, with John, they will achieve complete success.
http://www.thisisitaly-panorama.com/top-stories/interview-with-gianluigi-gabetti/

John Elkann keynote speech at the 21st summit of the Family Business Network
http://www.youtube.com/watch?v=UIOTfJO2low&feature=relmfu

All In The Family
http://www.time.com/time/magazine/article/0,9171,1207766-1,00.html

Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on November 27, 2012, 05:35:41 PM
Guy Spier.

http://www.forbes.com/sites/halahtouryalai/2012/11/26/best-ideas-2013-show-some-love-for-fiat-the-stock-could-double/
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on December 10, 2012, 05:48:02 PM
http://www.fiatspa.com/it-IT/investor_relations/investors/risultati_trimestrali/FiatDocuments/2012/Q3_2012_Results.pdf (http://www.fiatspa.com/it-IT/investor_relations/investors/risultati_trimestrali/FiatDocuments/2012/Q3_2012_Results.pdf)

Chrysler Group and Fiat continue to separately manage their own financial matters, including treasury services

 No guarantee, support or similar obligations in relation to other’s financing obligations; no obligation or commitment to provide funding to the other

 Financial segregation also supported by legally binding obligations

 Chrysler’s May 2011 credit agreement limits financial support to Fiat (inter alia cumulative limit on dividend payments of $500mn payable only if specified minimum liquidity is met)

 Fiat’s 3-year RCF also limits financial support to Chrysler (including limits on guarantees and loans)

 Chrysler’s financing agreements and its LLC Operating Agreement contain additional restrictions limiting related party transactions, including approval process for material commercial or financial transactions between the companies

These restrictions apply, while these instruments are in place, regardless of the percentage of Fiat’s ownership in Chrysler
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on December 12, 2012, 02:45:42 PM
From a 2005 VIC write-up, pre-spinoff of the Industrial division.

Why believe in Marchionne’s targets?  Marchionne’s track-record has gone somewhat unnoticed by many US investors, as well as European sell-side auto analysts who cover the company, as his past leadership experience has been largely Swiss-based and has ranged widely in sector from aluminum to industrial services to chemicals. Marchionne has successfully taken two companies, Alusuisse and SGS SA from the depths of seemingly inexorable problems, to highly profitable, best-in-class performers.

At Alusuisse, Marchionne brought a cash burning aluminum maker with negative operating margins to a 12% margin over 3 years, (exceeding the aggressive targets he had set for himself), split off its chemicals subsidiary (Lonza), and then sold Alusuisse to Alcan at a premium. 

At SGS, Sergio inherited an industrial testing company with 5.9% EBIT margins and a host of legacy credibility issues.  In less than 2 years, Sergio took margins to 12%, best-in-class, before leaving to join Fiat.  Both stocks tripled under Marchionne’s leadership.

Sergio is not new to analyst skepticism. Not one analyst believes Marchionne will make the targets laid out for 2007, just as no one believed his targets at SGS or Alusuisse. Sergio prefers to achieve his goals and then comment, which seems to leave the analyst community somewhat dumbfounded and skeptical. It may or may not be relevant to readers to see the evolution of analyst skepticism in historical turnarounds, but I have included a timeline of key events in the turnaround at SGS, analyst reaction and share price developments (included at the end).


Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on December 12, 2012, 03:09:02 PM
A bit of 2006 history. Still in awe that Ford and Fiat not just survived but prospered from the crisis.

Fiat: Italian giant still midway through multi-point turn
By Adrian Michaels
Published: September 27 2006 16:56
http://www.ft.com/cms/s/1/d579d5b6-4e3a-11db-bcbc-0000779e2340.html#ixzz2EsiDqoc0

Step one for Sergio Marchionne when he arrived as chief executive at Fiat in June 2004 was hiring and firing. Never has the Italian phrase “cleaning the piazza”, which denotes starting afresh in a seemingly ominous manner, been more appropriate.

Mr Marchionne even filled some posts more than once. He obviously was not happy with the appointment he had made in January 2005 of Karl-Heinz Kalbfell to the top of Alfa Romeo, part of the Fiat stable. The following September, Mr Kalbfell was moved on to run Maserati, also part of the group. This month Mr Kalbfell left Fiat completely.

“This was an incredibly hierarchical command and control leadership structure,” Mr Marchionne told the FT this year. “I spent a lot of time searching for people who were not just younger in age but were untouched by that [culture] and were ready to engage.”

Mr Marchionne moved fast out of necessity. Fiat was in financial peril and leaking €1bn in cash a year. Market share, even in Italy, was moving towards record lows. Not that long ago the company was sexy, an epitome of European cool. But it lost that reputation amid the production of dull cars.

Mr Marchionne had pressing balance sheet issues to fix along with the changes in personnel. A relationship with General Motors had gone sour and the two were arguing over an agreement that could have seen the US company forced to acquire the lossmaking Fiat Auto. That was resolved in Fiat’s favour early in 2005. GM paid Fiat €1.55bn to be able to walk away.

Fiat also cut its debt when it enforced a deal with bank lenders to exchange €3bn of debt for shares in the company. Three Italian banks still own 14 per cent.

The GM agreement had a crucial effect beyond the balance sheet. Mr Marchionne has seized the chance to forge partnerships with a number of other manufacturers.The alliances involve the sharing of the risks and costs of development of new models. They go some way towards answering criticism that Fiat can no longer survive on its own and must merge with a rival.

Fiat will be sharing a platform with Ford to develop a new “Cinquecento”, the iconic miniature Fiat of 40 years ago beloved of film buffs. Ford will develop a new generation of its Ka.

Fiat has also expanded its alliance with Peugeot of France, forged deals with India’s Tata, and with Suzuki and Severstal. Iveco. Fiat’s truckmaker, has just agreed a joint venture with SAIC in China.

And, finally, it has a major success on its hands. The company’s launch of its new Punto small car has been a hit, helping Fiat Auto record a small trading profit for the fourth quarter of 2005 after more than four years of quarterly losses.

Mr Marchionne has been methodically dealing with the issues one at a time. After Fiat’s own models had been addressed, he starting to talk aloud about a crisis at Alfa Romeo, where he saw a car marque aiming unsuccessfully to compete both against large BMWs and small Volkswagens. [RR: entering the USA in 2013]

Then he started to shake up CNH, the company’s agricultural and construction machinery arm. CNH has been profitable but its performance has lagged behind competitors. [RR: was spinned-off Fiat Industrial]

Lancia, the long-neglected marque that is also in the Fiat stable, came next. Lancia, among other things, is to be relaunched in the UK in 2008.

Investors are relatively happy about Fiat’s prospects, considering that between 2001 and 2004 the company lost almost €8bn. Fiat shares have leapt in the past year, and this month hit a four-year high.

But all that does not mean survival is guaranteed. The company has to show that it can follow the success of the Punto with more hit models. It is soon to replace its staid Stilo car. The new Cinquecento could be crucial.

And analysts are divided on whether the strategy of sharing production and development costs will help Fiat stay on its own in the long run. Philippe Houchois, analyst at JP Morgan, says: “Peugeot has been optimising its cost base and has still run into trouble.

“I think Fiat should take advantage of its current strength to sell its car business or move into a joint venture where it does not have control.”

That for now may be beyond Fiat’s thinking, but it is something for a new boss at Fiat Auto to ponder when appointed. Mr Marchionne is for now chief executive both of the group and Fiat Auto but is expected to step back from the car division soon.

Meanwhile the company would like to regain its investment grade status, last seen in 2002. Its May €1bn bond issue was almost priced as investment grade, analysts say, and a boost to its rating would significantly strengthen the company.
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on December 13, 2012, 10:30:02 AM
Good long interview with Marchionne.
http://www.youtube.com/watch?v=Q39ZywbcfN8


Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on December 13, 2012, 06:14:15 PM
5 year plan.
http://www.fiatspa.com/it-IT/investor_relations/investors/presentazioni/FiatDocuments/2010/Fiat_Analyst_investor_day_21_04_10/The_5-year_plan.pdf
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on December 13, 2012, 06:54:05 PM
Chrysler named 2012 Marketer of the Year by Advertising Age
http://www.autonews.com/article/20121126/RETAIL03/121129930#ixzz2EzVE23wo
Title: Re: FIATY - Fiat S.p.A.
Post by: txlaw on December 13, 2012, 09:19:05 PM
So what you're telling me, Plan, is that I should look into Fiat.

Damn, yet another potential investment to look into.  I'm sick of all of these opportunities presenting themselves.
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on December 13, 2012, 09:46:45 PM
LC, DCG and Sportgamma raised the idea. Though, since I spent the whole afternoon reading your good SHLD posts, I had to give back the favor.
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on December 14, 2012, 06:14:29 AM
VEBA call option.
http://www.4-traders.com/FIAT-SPA-69342/news/Fiat-rebuts-report-will-raise-funds-for-Chrysler-buy-15594619/
 (http://www.4-traders.com/FIAT-SPA-69342/news/Fiat-rebuts-report-will-raise-funds-for-Chrysler-buy-15594619/)

––––––––––––––––––––––––––––––

Fiat could sell parts unit for cash to buy Chrysler: Marchionne
http://www.4-traders.com/FIAT-SPA-69342/news/Fiat-SpA-Fiat-could-sell-parts-unit-for-cash-to-buy-Chrysler-Marchionne-15595764/
 (http://www.4-traders.com/FIAT-SPA-69342/news/Fiat-SpA-Fiat-could-sell-parts-unit-for-cash-to-buy-Chrysler-Marchionne-15595764/)

At a brief, impromptu news conference, Marchionne said Fiat has no need to tap the debt or equity markets to raise cash to purchase remaining Chrysler shares. Fiat owns 58.5 percent of the No. 3 U.S. automaker. While Fiat has ample cash on hand, he added, it could raise additional money if needed by selling assets, citing Magneti Marelli, which had revenue of 5.8 billion euros ($7.6 billion) last year, as an operation that could be sold. In the current weak economic environment, Marchionne said, "the availability of cash is crucial. It's better to be safe than sorry."

Magneti Marelli employs about 35,000 people worldwide. The unit designs and produces automotive components including lighting, electronics, suspension and exhaust.


––––––––––––––––––––––

Fiat CEO: plan to buy Chrysler shares
http://www.reuters.com/article/2012/12/14/us-fiat-chrysler-idUSBRE8BD0WG20121214 (http://www.reuters.com/article/2012/12/14/us-fiat-chrysler-idUSBRE8BD0WG20121214)

"We've always taken the position that we would have to pay them, but the question is price," said Marchionne, speaking on the sidelines of a meeting of the Council for the United States and Italy, an international-relations group. The current arbitration proceedings, he added, are "part of the dance".

If, as industry experts predict, the two sides cannot agree on a price by year-end, the trust fund can begin the process that would lead to an initial public offering of its shares, potentially depriving Fiat of its goal of gaining full ownership of Chrysler. However, the IPO process would take months to meet regulatory and other requirements, and a settlement could be reached during that time.

UBS estimates the fair value of Chrysler at between $9 billion and $13.4 billion, meaning the trust fund's 41.5 percent stake is worth between $4.1 billion and $5.5 billion.



––––––––––––––––––––––––––

Marchionne says Fiat will buy Chrysler shares, but expects more wrangling
http://www.autonews.com/apps/pbcs.dll/article?AID=/20121214/COPY01/312149851/marchionne-says-fiat-will-buy-chrysler-shares-but-expects-more (http://www.autonews.com/apps/pbcs.dll/article?AID=/20121214/COPY01/312149851/marchionne-says-fiat-will-buy-chrysler-shares-but-expects-more)

Earlier this week, Fiat asked the Delaware court to make a ruling on a series of legal briefs instead of holding a trial, according to a court document seen by Reuters. The UAW's VEBA must reply to Fiat's arguments by Jan. 25, and Fiat will file its reply on Feb. 28.

A judge is therefore unlikely to make a ruling on whether the case will go to trial until he has heard all the legal arguments from both sides, which won't be until March at the earliest.

Fiat would be unlikely to move forward with raising cash to buy the remaining 41.5 percent stake before a judge rules on the price it must pay for the 16.4 percent. "As long as the pricing of the Chrysler option has not been confirmed it will likely take until late 2013 before the courts reach a decision on the VEBA trust action," Credit Suisse said in a note to clients today. "The bottom line is that no acquisition will be possible until then," it said.
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on December 14, 2012, 01:20:23 PM
Two screenshots from the report LC posted to start this thread:

(http://farm9.staticflickr.com/8058/8272467251_8ce950d8ce.jpg) (http://www.flickr.com/photos/27516608@N00/8272467251/)


(http://farm9.staticflickr.com/8487/8262555755_9eb8cfc462.jpg) (http://www.flickr.com/photos/27516608@N00/8262555755/)

And another:

(http://farm9.staticflickr.com/8059/8273191171_fd55493982.jpg) (http://www.flickr.com/photos/27516608@N00/8273191171/)
Title: Re: FIATY - Fiat S.p.A.
Post by: txlaw on December 14, 2012, 04:49:01 PM
LC, DCG and Sportgamma raised the idea. Though, since I spent the whole afternoon reading your good SHLD posts, I had to give back the favor.

I will certainly read this thread when I have the chance.  Thanks to you guys who posted on Fiat.

You know, I went back and looked at some of my SHLD posts earlier today, and I couldn't help but chuckle when I came across Peter Burke CEO bashing me for my "grand elaborate plan" for SHLD and insisting that ESL buy back SHLD bonds.
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on December 14, 2012, 06:08:29 PM
You know, I went back and looked at some of my SHLD posts earlier today, and I couldn't help but chuckle when I came across Peter Burke CEO bashing me for my "grand elaborate plan" for SHLD and insisting that ESL buy back SHLD bonds.

I liked a lot your views on the possible Lampert's masterplan. My worry is how to have some early indicators to be sure that is working, and not just fall on the fallacy: Lampert is a smart guy –> so he surely has a great plan –> therefore, he will succeed. That is what I've been thinking about. Maybe to follow where he is opening the SHOS stores and where they are closing closing mall stores and check if there is a match.

Well, that is something to discuss on the SHLD thread.
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on December 17, 2012, 05:50:45 PM
Posted in the board a while back.

Marchionne to Change Chrysler Board by Month's End
August 4, 2011
By JEFF BENNETT

http://online.wsj.com/article/SB10001424053111903454504576485920161518138.html?mod=ITP_marketplace_1

Chrysler Group LLC and Fiat SpA Chief Executive Sergio Marchionne said he will change Chrysler's board by month's end and said he could retire sometime after 2015.

"There is going to be a guy after me, I guarantee you," he said. "Don't focus on the date, I would focus on the process."

"This large management team, where we have 22 people representing nine nationalities, is designed to be a proving ground for people to sit and manage," he said. "It's more than likely my successor will come from that structure."

Mr. Marchionne last week said he formed a Group Executive Council that will be responsible for running day-to-day business and for setting a unified, long-term strategy for Fiat and Chrysler. Until then, Mr. Marchionne had a team of about two dozen Chrysler executives reporting to him, and a similar situation at Fiat.

(…)

Regarding China, auto makers there currently "produce almost entirely for the enormous domestic market, but their future plans for the export market are significant," he said. "Even assuming China were to export only 10% of what it produces, the risk we face in our home markets is enormous."

Western auto makers "cannot afford to be unprepared for the ascent of China" and "need to continue to work to make our industrial base more competitive, because the day of reckoning is inevitably coming," he said.

Western auto makers also can't count on dramatic growth in Asia to drive prosperity so must make their North American and European operations more competitive, he said.
Title: Re: FIATY - Fiat S.p.A.
Post by: plato1976 on December 29, 2012, 05:39:21 PM
This NYT post is interesting:

http://www.nytimes.com/2012/11/02/business/global/skepticism-abounds-as-fiat-seeks-upmarket-strategy.html?pagewanted=all&_r=0

Fiat is an interesting enough stock and looks really cheap.
However, the question really boils down to, can FIAT europe survive by it own ? I think this is the market 's major concern at this time. Fiat 's current strategy is to use the spare capacity in Italy to produce upscale models and then export. But many question if Fiat has powerful enough distribution channel and dealer network to sell sth like alfa romeo. Also, Fiat is losing less than GM in Europe b/c it reduced its investment in new models.

I think in the worst case, Fiat can engineer a quick acquisition of Chrysler 's remaining shares , and then gain full flexibility to use its cash flow and do other synergies. But to gain a quick share appreciation in the near future, we need a stabilization of its EUR market, otherwise things will be quite ugly and we will see more downside, IMHO




Posted in the board a while back.

Marchionne to Change Chrysler Board by Month's End
August 4, 2011
By JEFF BENNETT

http://online.wsj.com/article/SB10001424053111903454504576485920161518138.html?mod=ITP_marketplace_1

Chrysler Group LLC and Fiat SpA Chief Executive Sergio Marchionne said he will change Chrysler's board by month's end and said he could retire sometime after 2015.

"There is going to be a guy after me, I guarantee you," he said. "Don't focus on the date, I would focus on the process."

"This large management team, where we have 22 people representing nine nationalities, is designed to be a proving ground for people to sit and manage," he said. "It's more than likely my successor will come from that structure."

Mr. Marchionne last week said he formed a Group Executive Council that will be responsible for running day-to-day business and for setting a unified, long-term strategy for Fiat and Chrysler. Until then, Mr. Marchionne had a team of about two dozen Chrysler executives reporting to him, and a similar situation at Fiat.

(…)

Regarding China, auto makers there currently "produce almost entirely for the enormous domestic market, but their future plans for the export market are significant," he said. "Even assuming China were to export only 10% of what it produces, the risk we face in our home markets is enormous."

Western auto makers "cannot afford to be unprepared for the ascent of China" and "need to continue to work to make our industrial base more competitive, because the day of reckoning is inevitably coming," he said.

Western auto makers also can't count on dramatic growth in Asia to drive prosperity so must make their North American and European operations more competitive, he said.
Title: Re: FIATY - Fiat S.p.A.
Post by: plato1976 on December 29, 2012, 05:48:39 PM
btw: I have a weird feeling that fiat is Pabrai 's secret 40x holding, as some suspected ...
Guess I will build a tiny position in this pullback and then study more - the europe market is a real headache

This NYT post is interesting:

http://www.nytimes.com/2012/11/02/business/global/skepticism-abounds-as-fiat-seeks-upmarket-strategy.html?pagewanted=all&_r=0

Fiat is an interesting enough stock and looks really cheap.
However, the question really boils down to, can FIAT europe survive by it own ? I think this is the market 's major concern at this time. Fiat 's current strategy is to use the spare capacity in Italy to produce upscale models and then export. But many question if Fiat has powerful enough distribution channel and dealer network to sell sth like alfa romeo. Also, Fiat is losing less than GM in Europe b/c it reduced its investment in new models.

I think in the worst case, Fiat can engineer a quick acquisition of Chrysler 's remaining shares , and then gain full flexibility to use its cash flow and do other synergies. But to gain a quick share appreciation in the near future, we need a stabilization of its EUR market, otherwise things will be quite ugly and we will see more downside, IMHO




Posted in the board a while back.

Marchionne to Change Chrysler Board by Month's End
August 4, 2011
By JEFF BENNETT

http://online.wsj.com/article/SB10001424053111903454504576485920161518138.html?mod=ITP_marketplace_1

Chrysler Group LLC and Fiat SpA Chief Executive Sergio Marchionne said he will change Chrysler's board by month's end and said he could retire sometime after 2015.

"There is going to be a guy after me, I guarantee you," he said. "Don't focus on the date, I would focus on the process."

"This large management team, where we have 22 people representing nine nationalities, is designed to be a proving ground for people to sit and manage," he said. "It's more than likely my successor will come from that structure."

Mr. Marchionne last week said he formed a Group Executive Council that will be responsible for running day-to-day business and for setting a unified, long-term strategy for Fiat and Chrysler. Until then, Mr. Marchionne had a team of about two dozen Chrysler executives reporting to him, and a similar situation at Fiat.

(…)

Regarding China, auto makers there currently "produce almost entirely for the enormous domestic market, but their future plans for the export market are significant," he said. "Even assuming China were to export only 10% of what it produces, the risk we face in our home markets is enormous."

Western auto makers "cannot afford to be unprepared for the ascent of China" and "need to continue to work to make our industrial base more competitive, because the day of reckoning is inevitably coming," he said.

Western auto makers also can't count on dramatic growth in Asia to drive prosperity so must make their North American and European operations more competitive, he said.
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on January 01, 2013, 02:18:48 PM
Reinventing Fiat in Europe will be a tough challenge
http://www.autonews.com/article/20121225/COPY01/312259982#ixzz2GlTLW2mZ

To improve Fiat's products and brands Altavilla can count on some magic from Olivier Francois, the energetic Frenchman who serves as Fiat-Chrysler's chief marketing officer, as well as Fiat brand's global boss.

But Altavilla must also make some tough industrial decisions to tackle excess capacity Fiat's four Italian plants that currently run below 40 percent utilization.

Here, there is little room for magic. Marchionne has promised the Italian government and unions that Fiat won't close any Italian vehicle assembly factories. The Cassino, Melfi, Mirafiori and Pomigliano plants have an installed capacity of about 1 million units, but are expected to build about 400,000 units this year.

Marchionne's strategy is to build more upscale models in the factories and to boost exports from Italy to global markets. Building higher value Fiats Alfas as well as a new small Jeep in Italy will bring bigger margins that will offset the high costs of producing in the country.

Analysts warn that Marchionne's plan is extremely challenging. UBS wrote in a note to investors: "Fiat did not quantify export targets, but we find it difficult to imagine more than 150,000 to 200,000 units a year at best. This means that Fiat will need to address capacity at some point in the near future." Barclays Capital said: "The majority of Fiat's competitors are pursuing the opposite strategy of trying to localize production wherever possible to hedge against currency risk." Barclays added: "Competitors have tried on numerous occasions but failed to push upscale, with the notable exception of Audi."

Last but not least, Altavilla won't have the crucial Italian market on his side. Fiat still dominates Italy with a market share of about 30 percent, but the country's car sales have been plunging since a 2.5 million unit peak in 2007. Next year, new-car sales are expected to shrink to 1.3 million from a forecast 1.4 million this year.
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on January 03, 2013, 11:43:13 AM
Fiat moves to boost stake in Chrysler to 65.2 percent
http://www.4-traders.com/FIAT-SPA-69342/news/Fiat-SpA-Fiat-moves-to-boost-stake-in-Chrysler-to-65-2-percent-15735188/

Italian carmaker Fiat said on Thursday it planned to exercise a call option to buy around 3.3 percent of Chrysler from the VEBA trust fund, boosting its stake in the U.S. peer to 65.17 percent.

In July Fiat exercised its option for a first tranche of around 3.3 percent of Chrysler from the VEBA fund.

Fiat said it estimated the net amount to be paid for the purchase of this second tranche is $198 million.

The group said the Chancery Court of Delaware is expected to decide over the price for the transaction in the next months.
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on January 03, 2013, 12:29:37 PM
December and 2012 sales numbers by group and brand.

http://www.autonews.com/apps/pbcs.dll/article?AID=/20130103/RETAIL01/130109991/chrysler-sales-rise-10-on-strong-fiat-car-volume#godown
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on January 03, 2013, 12:33:33 PM
Fiat beats annual production and sales records in Brazil.
http://www.4-traders.com/FIAT-SPA-69342/news/Fiat-SpA-Fiat-beats-annual-production-and-sales-records-in-Brazil-with-more-than-838-000-vehicles-15735025/

Full-year sales of cars and light commercial vehicles totaled 838,219 units, representing an 11.1% increase over the prior year (754,276 units) and a 10.2% increase over the previous sales record of 760,495 units set in 2010.

Leader for the past 11 years, Fiat outperformed the Brazilian market where sales of passenger cars and light commercial vehicles increased 6.1% in 2012 to 3,634,510 units (3,426,290 units sold in 2011). As a consequence, Fiat increased its share to 23.1% from 22% in 2011.
Title: Re: FIATY - Fiat S.p.A.
Post by: mhdousa on January 03, 2013, 12:49:42 PM
Fiat beats annual production and sales records in Brazil.
http://www.4-traders.com/FIAT-SPA-69342/news/Fiat-SpA-Fiat-beats-annual-production-and-sales-records-in-Brazil-with-more-than-838-000-vehicles-15735025/

Full-year sales of cars and light commercial vehicles totaled 838,219 units, representing an 11.1% increase over the prior year (754,276 units) and a 10.2% increase over the previous sales record of 760,495 units set in 2010.

Leader for the past 11 years, Fiat outperformed the Brazilian market where sales of passenger cars and light commercial vehicles increased 6.1% in 2012 to 3,634,510 units (3,426,290 units sold in 2011). As a consequence, Fiat increased its share to 23.1% from 22% in 2011.

Plan, just curious how big of a relative position have you established in FIATY?
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on January 03, 2013, 12:56:18 PM
Plan, just curious how big of a relative position have you established in FIATY?

Just tracking for the moment … if I eventually buy, it will be big.
Title: Re: FIATY - Fiat S.p.A.
Post by: txitxo on January 03, 2013, 01:05:55 PM
December and 2012 sales numbers by group and brand.

http://www.autonews.com/apps/pbcs.dll/article?AID=/20130103/RETAIL01/130109991/chrysler-sales-rise-10-on-strong-fiat-car-volume#godown

I've just seen that EXOR is showing up in one of my screens. I'll have to buy it now...
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on January 03, 2013, 03:15:26 PM
Dodge Dart posts best sales month yet despite Avenger discounts
http://en.wikipedia.org/wiki/Dodge_Dart_(2013)
 (http://en.wikipedia.org/wiki/Dodge_Dart_(2013))http://www.autonews.com/article/20130103/BLOG06/130109975#ixzz2GxOrnFbX (http://www.autonews.com/article/20130103/BLOG06/130109975#ixzz2GxOrnFbX)

Chrysler Group’s new Fiat-based compact sedan posted its best-ever sales month in December, more than a half-year after the 2013 Dodge Dart began showing up on dealer lots. The 6,105 Darts that dealers sold last month came as the four-door made the final cut on several Car of the Year lists and boosted its total U.S. sales for 2012 to 25,303 units.

That’s not a bad start for an all-new entry in one of the United States’ most competitive market segments. It’s even more notable because the Dart hit those numbers despite not having a customer cash incentive until late November and with a performance R/T version that has yet to arrive in showrooms.

But I would argue that it’s not yet quite fair to compare monthly Dart sales with segment competitors like the Ford Focus, Chevy Cruze and Honda Civic. Several Chrysler dealers in recent months have told me that one of the prime factors holding down potential Dart sales is in their own showrooms -- a deeply discounted Dodge Avenger.

RR: Marchionne has so far confirmed that the Avenger would get a second generation by 2014, however it will be based on the upcoming Alfa Romeo 169 mid-size sedan with features deriving from both Fiat and the current generation model. It might keep the "Avenger" nameplate, which so far remains unconfirmed.

http://en.wikipedia.org/wiki/Alfa_Romeo_169 (http://en.wikipedia.org/wiki/Alfa_Romeo_169)
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on January 07, 2013, 11:05:55 PM
Fiat moves to boost stake in Chrysler to 65.2 percent
http://www.4-traders.com/FIAT-SPA-69342/news/Fiat-SpA-Fiat-moves-to-boost-stake-in-Chrysler-to-65-2-percent-15735188/

Italian carmaker Fiat said on Thursday it planned to exercise a call option to buy around 3.3 percent of Chrysler from the VEBA trust fund, boosting its stake in the U.S. peer to 65.17 percent.

In July Fiat exercised its option for a first tranche of around 3.3 percent of Chrysler from the VEBA fund.

Fiat said it estimated the net amount to be paid for the purchase of this second tranche is $198 million.

The group said the Chancery Court of Delaware is expected to decide over the price for the transaction in the next months.

I am confused about this transaction. VEBA is suing Fiat over the price agreement in 2009, but what will they argument be? They agreed with this in 2009 and now they can retract that?

If this is being legally challenged, then how can Fiat still buy some more 3.3 pct for $198 M without VEBA somehow preventing it to do so? If this is something that is yet up to the court to decide, then if the court rules in favor of VEBA, then will this transaction be reversed?

Lastly, if Fiat really has to pay $1.7 Bn for the remaining 16% stake, does it have that liquidity to do so?
It looks to me that it has 20 bn liquidity, so probably in the worst case, it can just pay $1.7 bn and complete the merger?
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on January 07, 2013, 11:06:36 PM
Why is everyone so concerned with Fiat's Europe operations, when it is actually less exposed than GM and Ford?
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on January 09, 2013, 02:46:17 PM
Fiat SpA : Chrysler minority owner pushes first step toward IPO
http://www.4-traders.com/FIAT-SPA-69342/news/Fiat-SpA-Chrysler-minority-owner-pushes-first-step-toward-IPO-15764248/

The minority owner of Chrysler Group LLC on Wednesday pushed the U.S. automaker to take the first step toward becoming a public company again by demanding that Chrysler register shares with U.S. regulators.

The minority owner, a United Auto Workers union retiree healthcare trust, demanded that Chrysler register 16.6 percent of company shares with the U.S. Securities and Exchange Commission. The trust has the right to make the demand because of the 2009 agreement that brought Chrysler out of bankruptcy and left Fiat SpA as part-owner.

The Italian automaker now owns 58.5 percent of Chrysler and the healthcare trust, a voluntary employee beneficiary association (VEBA), owns 41.5 percent.
[…]


London-based UBS analyst Philippe Houchois said the move by the VEBA to force Chrysler to register shares is a ploy in a separate battle over the value of Chrysler shares, and that there will not be an IPO.

Fiat and the VEBA are fighting over the value of a 3.3 percent share of Chrysler. The same 2009 agreement that allows the trust to demand that Chrysler register to sell shares to the public allows Fiat to make periodic purchases of Chrysler shares from the VEBA.

Last July, Fiat filed for the first 3.3 percent tranche of VEBA-owned Chrysler shares. The VEBA balked at the price Fiat offered, $139.7 million, saying it was too low. Fiat in September filed suit against the VEBA to force the healthcare trust to sell the shares.

The issue is now being considered by a Delaware court.

"Fiat is trying to buy Chrysler on the cheap," said Houchois. "VEBA's only pressure it can put on Fiat is to list the shares in an IPO to get a higher price. It's a recognition that VEBA's case is weak. I don't think there will be an IPO."
Title: Re: FIATY - Fiat S.p.A.
Post by: jch548 on January 09, 2013, 10:27:24 PM
Fiat needs 80% ownership in Chrysler to pull cash out.
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on January 10, 2013, 07:50:08 AM
Italy's sales decline takes us back to 1979
http://europe.autonews.com/article/20130110/BLOG15/301109995/italys-sales-decline-takes-us-back-to-1979

Italy car sales last year fell 20 percent to 1.4 million units, the country's worst result in 33 years. Back then, domestic automakers had a dominating 61.7 percent share of the market, in 2012 they controlled just 29.7 percent.

In 1979, Fiat brand sold 641,967 cars in Italy and had a 46 percent share of the market. Last year Fiat sold 294,778 cars and its share was 21 percent.

Wonder why Alfa Romeo is in so much trouble? Consider this: The Fiat-owned brand sold 106,074 cars in Italy in 1979. It's unlikely Alfa sold that many cars globally in 2012. In Italy, the brand's 2012 total was 42,174 sales.

Where did all those Alfa buyers go? To Audi, BMW and Mercedes-Benz. Last year, the German trio sold a combined 135,840 vehicles compared with just 35,806 in 1979.

Thirty-three years ago Asian automakers controlled a tiny piece of the Italian car market as Korean brands were not exporting to Europe and the Japanese faced an import quota. In 2012, Asian brands had a 17.1 percent share in Italy. Toyota was Italy's No. 1 Asian brand with 55,178 units sold, while Hyundai-Kia was the country's biggest Asian auto group with a combined 70,478 sales.

In 1979, Renault was Italy's top-selling non-Italian brand, followed by Citroen and Volkswagen. Last year, VW was the No. 1 foreign brand, ahead of Ford and Citroen, with Renault slipping to sixth place.


Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on January 13, 2013, 12:03:49 PM
You also might want to consider Exor (www.exor.com). They hold 30% of Fiat and 30% of Fiat industrial + some other investments. The Mackenzie Cundill funds own it, and Bestinver also owns it.

I myself am long exor. They seem to actively manage value, f.e. by separating Industrial from Fiat group and the Chrysler deal seems to have been on very good terms.

Because they hold other assets and are levered on the liability side of the balance sheet as well, any upwards movement by Fiat will translate into similar nav gains as holding fiat directly. Also, the exor stock is trading at significant discount to nav (historically they trade with a conglomerate discount, just not that severe), so you get and undervalued stock within an undervalued holding company.

(http://sportgamma.files.wordpress.com/2012/01/simplemaths.jpg)

There is a heap of reports on the borsa italia website: http://www.borsaitaliana.it

Exor
- http://www.borsaitaliana.it/mediasource/star/db/pdf/87267.pdf

- http://www.borsaitaliana.it/borsa/azioni/documenti/societa-quotate/studi-e-ricerche.html?search=Y&lang=en&tipology=null&company=149&sender=null&docDate=&day=&month=&year=&numDoc=

Fiat
http://www.borsaitaliana.it/borsa/azioni/documenti/societa-quotate/studi-e-ricerche.html?search=Y&lang=en&tipology=null&company=125&sender=null&docDate=&day=&month=&year=&numDoc=

Fiat Industrial
- http://www.borsaitaliana.it/borsa/azioni/documenti/societa-quotate/studi-e-ricerche.html?search=Y&lang=en&tipology=null&company=1188&sender=null&docDate=&day=&month=&year=&numDoc=

Do you know if EXOR guarantees any of the subsidiary's debt? I couldn't find that info anywhere.
EXOR's Fiat industrial's value is about twice that of Fiat. So if we want to long EXOR, we need to make sure Fiat industrial also look good, right?
Its trailing P/E seems to be around 14, which is not too expensive, but not cheap. There should be some further growth driven by higher Corn and Rice prices all over the world, but do you think this one's potential is as good as Fiat? Maybe this one's a 2 begger, but Fiat's a 8 begger?
So if we take a weighted average on this, it will be about 4 begger? That is not bad at all assuming all of the other EXOR subs are worth zero.
Additional, do you think EXOR is created to benefit shareholders, or it is more like something to enrich the Agnelli family?
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on January 13, 2013, 12:33:06 PM
Italy's sales decline takes us back to 1979
http://europe.autonews.com/article/20130110/BLOG15/301109995/italys-sales-decline-takes-us-back-to-1979

Italy car sales last year fell 20 percent to 1.4 million units, the country's worst result in 33 years. Back then, domestic automakers had a dominating 61.7 percent share of the market, in 2012 they controlled just 29.7 percent.

In 1979, Fiat brand sold 641,967 cars in Italy and had a 46 percent share of the market. Last year Fiat sold 294,778 cars and its share was 21 percent.

Wonder why Alfa Romeo is in so much trouble? Consider this: The Fiat-owned brand sold 106,074 cars in Italy in 1979. It's unlikely Alfa sold that many cars globally in 2012. In Italy, the brand's 2012 total was 42,174 sales.

Where did all those Alfa buyers go? To Audi, BMW and Mercedes-Benz. Last year, the German trio sold a combined 135,840 vehicles compared with just 35,806 in 1979.

Thirty-three years ago Asian automakers controlled a tiny piece of the Italian car market as Korean brands were not exporting to Europe and the Japanese faced an import quota. In 2012, Asian brands had a 17.1 percent share in Italy. Toyota was Italy's No. 1 Asian brand with 55,178 units sold, while Hyundai-Kia was the country's biggest Asian auto group with a combined 70,478 sales.

In 1979, Renault was Italy's top-selling non-Italian brand, followed by Citroen and Volkswagen. Last year, VW was the No. 1 foreign brand, ahead of Ford and Citroen, with Renault slipping to sixth place.

Plan, have you taken a long position on FIATY yet? I know you have tracked this one for a while now.
Title: Re: FIATY - Fiat S.p.A.
Post by: txlaw on January 13, 2013, 12:40:47 PM
Alfa Romeo 4C spotted in Michigan:

http://www.autoweek.com/article/20130111/CARNEWS/130119942
Title: Re: FIATY - Fiat S.p.A.
Post by: txlaw on January 13, 2013, 12:52:28 PM
Fiat/Chrysler to produced Jeep in China:

http://www.reuters.com/article/2013/01/13/us-fiat-chrysler-idUSBRE90C06F20130113
Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on January 13, 2013, 06:33:27 PM
Quote
Do you know if EXOR guarantees any of the subsidiary's debt? I couldn't find that info anywhere.
EXOR's Fiat industrial's value is about twice that of Fiat. So if we want to long EXOR, we need to make sure Fiat industrial also look good, right?
Its trailing P/E seems to be around 14, which is not too expensive, but not cheap. There should be some further growth driven by higher Corn and Rice prices all over the world, but do you think this one's potential is as good as Fiat? Maybe this one's a 2 begger, but Fiat's a 8 begger?
So if we take a weighted average on this, it will be about 4 begger? That is not bad at all assuming all of the other EXOR subs are worth zero.
Additional, do you think EXOR is created to benefit shareholders, or it is more like something to enrich the Agnelli family?

1. Does Exor guarantee any subsidiary debt? I have not found anything in their financial statements indicating that they do. However you might want to ask yourself how they would react if a liquidity issue were to occur. I would consider it probable that Exor would be forced to inject cash if such an event were to take place. I recommend that you read note 27 of the 2011 Annual Report as it covers details on Exor and subsidiary debt (http://www.exor.com/uploads/552033-EXOR%20Annual%20Report%202011%20completo%2030%20maggio.pdf).

2. Regarding Fiat Industrial. There is not the same upside potential to FI than F but there is also less uncertainty around FI. After the merger with CNH a NewCo will be created, with a more simpler structure and likely a lower cost of capital. There are is also a tax rationale for the merger. I would not expect FI to be a 2xbagger over a short term though...
Here is an equity research by Goldman Sachs: http://www.borsaitaliana.it/documenti/studi.htm?filename=92348.pdf
Updates can be found here: http://www.borsaitaliana.it/borsa/azioni/documenti/societa-quotate/studi-e-ricerche.html?search=Y&lang=en&tipology=null&company=1188&sender=null&docDate=&day=&month=&year=&numDoc&page=2

3. Is Exor created for the benefit of the shareholders? Exor was created out of IFI and IFIL in a 2008 reorg. Giovanni Agnelli & Co (representing the Agnelli family) owns more than 50% of Exor and John Elkann is in control of Giovanni Agnelli & Co as he holds majority voting power within GA&Co. I recommend watching his discussion on Exor at the Family Business Network (http://www.youtube.com/watch?v=UIOTfJO2low). One thing Exor does is provide more liquidity and a more efficient pricing (as opposed to IFI and IFIL) for those Agnelli family members who would want to sell shares, so in that sense it is created for the benefit of shareholders. But as in other owner operator companies, nothing will happen without the approval of the one in control so you either trust them or you don´t. They are trying to simplify the capital structures of Exor and subs, so that should bring more clarity for all shareholders and could be viewed as positive.
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on January 14, 2013, 08:42:00 AM
Quote
Do you know if EXOR guarantees any of the subsidiary's debt? I couldn't find that info anywhere.
EXOR's Fiat industrial's value is about twice that of Fiat. So if we want to long EXOR, we need to make sure Fiat industrial also look good, right?
Its trailing P/E seems to be around 14, which is not too expensive, but not cheap. There should be some further growth driven by higher Corn and Rice prices all over the world, but do you think this one's potential is as good as Fiat? Maybe this one's a 2 begger, but Fiat's a 8 begger?
So if we take a weighted average on this, it will be about 4 begger? That is not bad at all assuming all of the other EXOR subs are worth zero.
Additional, do you think EXOR is created to benefit shareholders, or it is more like something to enrich the Agnelli family?

1. Does Exor guarantee any subsidiary debt? I have not found anything in their financial statements indicating that they do. However you might want to ask yourself how they would react if a liquidity issue were to occur. I would consider it probable that Exor would be forced to inject cash if such an event were to take place. I recommend that you read note 27 of the 2011 Annual Report as it covers details on Exor and subsidiary debt (http://www.exor.com/uploads/552033-EXOR%20Annual%20Report%202011%20completo%2030%20maggio.pdf).

2. Regarding Fiat Industrial. There is not the same upside potential to FI than F but there is also less uncertainty around FI. After the merger with CNH a NewCo will be created, with a more simpler structure and likely a lower cost of capital. There are is also a tax rationale for the merger. I would not expect FI to be a 2xbagger over a short term though...
Here is an equity research by Goldman Sachs: http://www.borsaitaliana.it/documenti/studi.htm?filename=92348.pdf
Updates can be found here: http://www.borsaitaliana.it/borsa/azioni/documenti/societa-quotate/studi-e-ricerche.html?search=Y&lang=en&tipology=null&company=1188&sender=null&docDate=&day=&month=&year=&numDoc&page=2

3. Is Exor created for the benefit of the shareholders? Exor was created out of IFI and IFIL in a 2008 reorg. Giovanni Agnelli & Co (representing the Agnelli family) owns more than 50% of Exor and John Elkann is in control of Giovanni Agnelli & Co as he holds majority voting power within GA&Co. I recommend watching his discussion on Exor at the Family Business Network (http://www.youtube.com/watch?v=UIOTfJO2low). One thing Exor does is provide more liquidity and a more efficient pricing (as opposed to IFI and IFIL) for those Agnelli family members who would want to sell shares, so in that sense it is created for the benefit of shareholders. But as in other owner operator companies, nothing will happen without the approval of the one in control so you either trust them or you don´t. They are trying to simplify the capital structures of Exor and subs, so that should bring more clarity for all shareholders and could be viewed as positive.

Thank you!
Fiat industrial's upside is much lower than that of Fiat, though there is less risk. Overall, the idea that taking a long in EXOR only gets me 1/3 of exposure to Fiat and 2/3 of exposure to Fiat industrial disturbs me a bit.
Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on January 14, 2013, 09:02:10 AM
Quote
Do you know if EXOR guarantees any of the subsidiary's debt? I couldn't find that info anywhere.
EXOR's Fiat industrial's value is about twice that of Fiat. So if we want to long EXOR, we need to make sure Fiat industrial also look good, right?
Its trailing P/E seems to be around 14, which is not too expensive, but not cheap. There should be some further growth driven by higher Corn and Rice prices all over the world, but do you think this one's potential is as good as Fiat? Maybe this one's a 2 begger, but Fiat's a 8 begger?
So if we take a weighted average on this, it will be about 4 begger? That is not bad at all assuming all of the other EXOR subs are worth zero.
Additional, do you think EXOR is created to benefit shareholders, or it is more like something to enrich the Agnelli family?

1. Does Exor guarantee any subsidiary debt? I have not found anything in their financial statements indicating that they do. However you might want to ask yourself how they would react if a liquidity issue were to occur. I would consider it probable that Exor would be forced to inject cash if such an event were to take place. I recommend that you read note 27 of the 2011 Annual Report as it covers details on Exor and subsidiary debt (http://www.exor.com/uploads/552033-EXOR%20Annual%20Report%202011%20completo%2030%20maggio.pdf).

2. Regarding Fiat Industrial. There is not the same upside potential to FI than F but there is also less uncertainty around FI. After the merger with CNH a NewCo will be created, with a more simpler structure and likely a lower cost of capital. There are is also a tax rationale for the merger. I would not expect FI to be a 2xbagger over a short term though...
Here is an equity research by Goldman Sachs: http://www.borsaitaliana.it/documenti/studi.htm?filename=92348.pdf
Updates can be found here: http://www.borsaitaliana.it/borsa/azioni/documenti/societa-quotate/studi-e-ricerche.html?search=Y&lang=en&tipology=null&company=1188&sender=null&docDate=&day=&month=&year=&numDoc&page=2

3. Is Exor created for the benefit of the shareholders? Exor was created out of IFI and IFIL in a 2008 reorg. Giovanni Agnelli & Co (representing the Agnelli family) owns more than 50% of Exor and John Elkann is in control of Giovanni Agnelli & Co as he holds majority voting power within GA&Co. I recommend watching his discussion on Exor at the Family Business Network (http://www.youtube.com/watch?v=UIOTfJO2low). One thing Exor does is provide more liquidity and a more efficient pricing (as opposed to IFI and IFIL) for those Agnelli family members who would want to sell shares, so in that sense it is created for the benefit of shareholders. But as in other owner operator companies, nothing will happen without the approval of the one in control so you either trust them or you don´t. They are trying to simplify the capital structures of Exor and subs, so that should bring more clarity for all shareholders and could be viewed as positive.

Thank you!
Fiat industrial's upside is much lower than that of Fiat, though there is less risk. Overall, the idea that taking a long in EXOR only gets me 1/3 of exposure to Fiat and 2/3 of exposure to Fiat industrial disturbs me a bit.

You're welcome.

For your consideration: Exor is more than 1/3 Fiat and 2/3 Fiat Industrial, but if you add SGS and Cushman & Wakefield these four will account for about 80% of the assets. Exor also carries debt, so there is a leverage effect from that, has more cash (+equivalents) then it needs and is trading well under book value.

Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on January 14, 2013, 10:41:13 AM
Marchionne says Dart's slow start due to transmission availability
Sales of the 2013 Dodge Dart have been slow because the car didn't launch with the transmission it should have, Chrysler-Fiat CEO Sergio Marchionne said this morning. Speaking to journalists at the Detroit auto show, Marchionne said Dart sales were hampered because only manual transmissions were available at first, with a six-speed automatic sourced from Hyundai serving as a stopgap until a promised nine-speed automatic is available.

PS: Muscleman, I don't like much to talk about my portfolio or returns.  Each one has to make his own decisions. This is one reason I am not blogging as much, too much wasted time talking about what and when instead of why and how. There is a lot of info here.
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on January 14, 2013, 10:46:08 AM
Read more: http://www.autonews.com/article/20130114/BLOG06/130119920#ixzz2HydU0g7o

Chrysler showed a brief video about "passion," had Jeep CEO Mike Manley give short introductions and then drove the SUVs onto the stage. Manley had a bit of a swagger as he noted that Jeep set a global sales record in 2012 and "regained its rightful place as the number-one SUV brand in America."

But it just doesn't feel like a real Chrysler reveal unless there's an hour or two of cleanup required afterward.

Of course, even a run-of-the-mill press conference marks a big step up from where Chrysler was a few years ago. Its stand in 2009 was so cheaply done that a large metal Pentastar logo fell from the ceiling, nearly taking out a journalist below, and it had no formal event at all the following year, because it had nothing new to talk up.

Chrysler's new strategy looks to be showing off by not showing off.

Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on January 14, 2013, 12:07:27 PM
Quote
Do you know if EXOR guarantees any of the subsidiary's debt? I couldn't find that info anywhere.
EXOR's Fiat industrial's value is about twice that of Fiat. So if we want to long EXOR, we need to make sure Fiat industrial also look good, right?
Its trailing P/E seems to be around 14, which is not too expensive, but not cheap. There should be some further growth driven by higher Corn and Rice prices all over the world, but do you think this one's potential is as good as Fiat? Maybe this one's a 2 begger, but Fiat's a 8 begger?
So if we take a weighted average on this, it will be about 4 begger? That is not bad at all assuming all of the other EXOR subs are worth zero.
Additional, do you think EXOR is created to benefit shareholders, or it is more like something to enrich the Agnelli family?

1. Does Exor guarantee any subsidiary debt? I have not found anything in their financial statements indicating that they do. However you might want to ask yourself how they would react if a liquidity issue were to occur. I would consider it probable that Exor would be forced to inject cash if such an event were to take place. I recommend that you read note 27 of the 2011 Annual Report as it covers details on Exor and subsidiary debt (http://www.exor.com/uploads/552033-EXOR%20Annual%20Report%202011%20completo%2030%20maggio.pdf).

2. Regarding Fiat Industrial. There is not the same upside potential to FI than F but there is also less uncertainty around FI. After the merger with CNH a NewCo will be created, with a more simpler structure and likely a lower cost of capital. There are is also a tax rationale for the merger. I would not expect FI to be a 2xbagger over a short term though...
Here is an equity research by Goldman Sachs: http://www.borsaitaliana.it/documenti/studi.htm?filename=92348.pdf
Updates can be found here: http://www.borsaitaliana.it/borsa/azioni/documenti/societa-quotate/studi-e-ricerche.html?search=Y&lang=en&tipology=null&company=1188&sender=null&docDate=&day=&month=&year=&numDoc&page=2

3. Is Exor created for the benefit of the shareholders? Exor was created out of IFI and IFIL in a 2008 reorg. Giovanni Agnelli & Co (representing the Agnelli family) owns more than 50% of Exor and John Elkann is in control of Giovanni Agnelli & Co as he holds majority voting power within GA&Co. I recommend watching his discussion on Exor at the Family Business Network (http://www.youtube.com/watch?v=UIOTfJO2low). One thing Exor does is provide more liquidity and a more efficient pricing (as opposed to IFI and IFIL) for those Agnelli family members who would want to sell shares, so in that sense it is created for the benefit of shareholders. But as in other owner operator companies, nothing will happen without the approval of the one in control so you either trust them or you don´t. They are trying to simplify the capital structures of Exor and subs, so that should bring more clarity for all shareholders and could be viewed as positive.

Thank you!
Fiat industrial's upside is much lower than that of Fiat, though there is less risk. Overall, the idea that taking a long in EXOR only gets me 1/3 of exposure to Fiat and 2/3 of exposure to Fiat industrial disturbs me a bit.

You're welcome.

For your consideration: Exor is more than 1/3 Fiat and 2/3 Fiat Industrial, but if you add SGS and Cushman & Wakefield these four will account for about 80% of the assets. Exor also carries debt, so there is a leverage effect from that, has more cash (+equivalents) then it needs and is trading well under book value.

Yes. Those other subs are hard to understand, and they don't seem to report a decent profit, so I would like to be conservative and assign value 0 to them.
I wish I could understand SGS and C&W better. :)
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on January 14, 2013, 12:09:08 PM
Marchionne says Dart's slow start due to transmission availability
Sales of the 2013 Dodge Dart have been slow because the car didn't launch with the transmission it should have, Chrysler-Fiat CEO Sergio Marchionne said this morning. Speaking to journalists at the Detroit auto show, Marchionne said Dart sales were hampered because only manual transmissions were available at first, with a six-speed automatic sourced from Hyundai serving as a stopgap until a promised nine-speed automatic is available.

PS: Muscleman, I don't like much to talk about my portfolio or returns.  Each one has to make his own decisions. This is one reason I am not blogging as much, too much wasted time talking about what and when instead of why and how. There is a lot of info here.

Thank you Plan. Nice to see you here.
Title: Re: FIATY - Fiat S.p.A.
Post by: txlaw on January 14, 2013, 02:20:44 PM
http://dealbook.nytimes.com/2013/01/14/valuing-chrysler-too-cheaply/
Title: Re: FIATY - Fiat S.p.A.
Post by: txlaw on January 14, 2013, 03:17:51 PM
http://www.reuters.com/article/2013/01/14/us-autoshow-fiat-alfa-idUSBRE90D16J20130114

He's frank, but his word choice is a bit odd . . .

Gotta get that Italian capacity utilized, I guess.
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on January 14, 2013, 07:17:55 PM
http://www.reuters.com/article/2013/01/14/us-autoshow-fiat-alfa-idUSBRE90D16J20130114

He's frank, but his word choice is a bit odd . . .

Gotta get that Italian capacity utilized, I guess.

Do you know how long will the Alfa delay to be?
I hope not too bad. :)
Title: Re: FIATY - Fiat S.p.A.
Post by: txlaw on January 14, 2013, 07:22:21 PM
http://www.reuters.com/article/2013/01/14/us-autoshow-fiat-alfa-idUSBRE90D16J20130114

He's frank, but his word choice is a bit odd . . .

Gotta get that Italian capacity utilized, I guess.

Do you know how long will the Alfa delay to be?
I hope not too bad. :)

No idea. 

Yeah, it looks like a pretty sweet car.

Actually, I've been really impressed with all these cars that have been coming out recently -- it's like design is back.

Scion FRS/Subaru BRZ
Cadillac ELR
New Corvette Stingray
Alfa Romeo 4C
Tesla Model S and Model X

Any more that people are impressed with?
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on January 14, 2013, 09:02:38 PM
Fiat pegs Chrysler as most undervalued carmaker
http://blogs.reuters.com/breakingviews/2013/01/14/fiat-pegs-chrysler-as-most-undervalued-carmaker/

Marchionne to narrow Fiat European loss as market hits bottom
http://www.autonews.com/article/20130114/ANE/301149730#ixzz2I19PLpU2
Title: Re: FIATY - Fiat S.p.A.
Post by: Edward on January 14, 2013, 11:17:31 PM
Europe's Car Market 'Broken' Says Chrysler-Fiat CEO Sergio Marchionne, Could Get Worse
http://www.forbes.com/sites/danbigman/2013/01/14/chrysler-fiat-ceo-sergio-marchionne-2013-must-be-transformational-for-europe-to-avert-disaster-for-car-companies/

Some interesting comments, looks to me like a future opportunity.
Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on January 15, 2013, 03:28:34 AM
Fiat pegs Chrysler as most undervalued carmaker
http://blogs.reuters.com/breakingviews/2013/01/14/fiat-pegs-chrysler-as-most-undervalued-carmaker/

Marchionne to narrow Fiat European loss as market hits bottom
http://www.autonews.com/article/20130114/ANE/301149730#ixzz2I19PLpU2

From Fiat pegs Chrysler as most undervalued carmaker
Quote

The Fiat boss says the offer follows from the agreement struck with the UAW trust in 2009 when the U.S. government divvied up ownership after bailing Chrysler out. Fiat took control, now owns 58.5 percent, and wants to fully integrate its American subsidiary. Marchionne’s price, though, assumes the deal contained a clerical error pegging any acquisitions from the trust to Chrysler’s performance. He says that should have referred instead to Fiat which, like other European automakers, is suffering.

The trust, which owns the other 41.5 percent of the carmaker, has rejected the offer and asked Fiat to prepare to sell up to 16.6 percent of Chrysler on the open market. If that’s a ploy to establish a higher valuation, it should work. Marchionne’s offer values Chrysler at just four times his own expectation of the company’s 2012 net income. General Motors, meanwhile trades above nine times expected earnings for last year, and Ford’s multiple is just over 10 times.

How would this hold up in court?
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on January 15, 2013, 09:58:24 AM
Chrysler CEO Sees Big Rise in Pick-Up Sales
http://www.4-traders.com/FIAT-SPA-69342/news/Chrysler-CEO-Sees-Big-Rise-in-Pick-Up-Sales-15827255/

"It is a business that we expect to grow significantly in 2013 because it is associated with the economic recovery cycle especially in connection with housing in the United States, which we expect to increase substantially over 2012," he told a news conference at the North American International Auto Show.

"So just in terms of rough numbers, I would expect the pick-up market on a percentage basis to do better than the passenger car market," he added.

Chrysler and other U.S. automakers make more money from the sale of pick-up trucks than they do from passenger cars, so any rise in their sales can help drive profitability.

Competition among these automakers is expected to intensify with the arrival of new models, such as the Chevrolet Silverado from General Motors Co (>> General Motors Company).

Chrysler, which is majority owned by Italy's Fiat SpA (>> Fiat SpA), has just launched a heavily updated version of its popular RAM 1500, which won the Truck of the Year award at this year's Detroit auto show.
Title: Re: FIATY - Fiat S.p.A.
Post by: txlaw on January 15, 2013, 11:18:45 AM
Chysler/Fiat reach preliminary agreement to make Jeeps in China.

http://www.bloomberg.com/news/2013-01-15/chrysler-fiat-reach-accord-to-make-jeeps-in-china.html
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on January 15, 2013, 12:48:52 PM
Bloomberg interviews Marchionne
http://www.bloomberg.com/video/marchionne-sees-no-improvement-in-europe-in-2013-KhX5iqAZSNKYhVO2j_du3Q.html

SRT. Great looking cars, but I guess what's coming is more about Jeep and Alfa Romeo.
http://www.bloomberg.com/video/gilles-our-cars-are-very-popular-in-mid-east-euDu1lhDSG~QAHyYgC5rRA.html


Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on January 15, 2013, 08:01:25 PM
Read more: http://www.autonews.com/article/20130114/BLOG06/130119920#ixzz2HydU0g7o

Chrysler showed a brief video about "passion," had Jeep CEO Mike Manley give short introductions and then drove the SUVs onto the stage. Manley had a bit of a swagger as he noted that Jeep set a global sales record in 2012 and "regained its rightful place as the number-one SUV brand in America."

But it just doesn't feel like a real Chrysler reveal unless there's an hour or two of cleanup required afterward.

Of course, even a run-of-the-mill press conference marks a big step up from where Chrysler was a few years ago. Its stand in 2009 was so cheaply done that a large metal Pentastar logo fell from the ceiling, nearly taking out a journalist below, and it had no formal event at all the following year, because it had nothing new to talk up.

Chrysler's new strategy looks to be showing off by not showing off.


Plan, I agree that Chrysler's future will be very bright.
Regarding the Fiat vs VEBA fight, in the worst case scenario, Fiat has the option to buy all of VEBA's shares for $5.5 bn, and Fiat has $20 bn cash, so even if it cannot negotiate a stunning bargain, it is not too bad to buy those shares at $5.5 bn, is it? Chrysler will be a big cash cow after the release of the new dodge Ram.
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on January 15, 2013, 10:00:24 PM
so even if it cannot negotiate a stunning bargain, it is not too bad to buy those shares at $5.5 bn, is it? Chrysler will be a big cash cow after the release of the new dodge Ram.

Agree.
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on January 16, 2013, 07:51:45 AM
so even if it cannot negotiate a stunning bargain, it is not too bad to buy those shares at $5.5 bn, is it? Chrysler will be a big cash cow after the release of the new dodge Ram.

Agree.

I tried to find any formal documents regarding the call option. I don't want to hear from news reporters. This is the only one I find, but it does not say exactly what the price is for the call option. That is so weird.
http://www.sec.gov/Archives/edgar/data/1513153/000119312511078025/dex992.htm

Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on January 16, 2013, 10:53:35 AM
European sales by brand.
http://www.4-traders.com/FIAT-SPA-69342/news/Fiat-SpA-2012-Fiat-Chrysler-sales-in-Europe-15829547/

Title: Re: FIATY - Fiat S.p.A.
Post by: txlaw on January 16, 2013, 03:04:05 PM
http://www.business-standard.com/india/news/fiat-india-to-help-parent-company-develop-smallest-jeep/499051/

http://www.financialexpress.com/news/fiat-s-pune-plant-to-become-export-hub/1059809

http://www.prnewswire.com/news-releases/fiat-of-austin-named-the-number-one-fiat-dealer-in-north-america-187102751.html
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on January 17, 2013, 07:38:37 AM
http://www.business-standard.com/india/news/fiat-india-to-help-parent-company-develop-smallest-jeep/499051/

http://www.financialexpress.com/news/fiat-s-pune-plant-to-become-export-hub/1059809

http://www.prnewswire.com/news-releases/fiat-of-austin-named-the-number-one-fiat-dealer-in-north-america-187102751.html

Is India a reliable place to R&D cars?
I heard some jokes before that after Tata acquired Land Rover, it sent out its best engineers to UK to learn the technology. In the end they couldn't understand the technology.
I also heard 2 years ago that Tata motor's world's cheapest new car (less than $3000) had serious reliability problems and they had to stop production for it.

I hope Fiat is aware of that, and has a different way of quality control.
Title: Re: FIATY - Fiat S.p.A.
Post by: txlaw on January 17, 2013, 12:36:28 PM
Chrysler and Santander talking about establishing in-house financing arm.

http://online.wsj.com/article/SB10001424127887323968304578247842712019994.html
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on January 17, 2013, 12:56:12 PM
This is big. Thanks txlaw.

Chrysler and Santander talking about establishing in-house financing arm.

http://online.wsj.com/article/SB10001424127887323968304578247842712019994.html
Title: Re: FIATY - Fiat S.p.A.
Post by: txlaw on January 17, 2013, 12:56:16 PM
http://www.business-standard.com/india/news/fiat-india-to-help-parent-company-develop-smallest-jeep/499051/

http://www.financialexpress.com/news/fiat-s-pune-plant-to-become-export-hub/1059809

http://www.prnewswire.com/news-releases/fiat-of-austin-named-the-number-one-fiat-dealer-in-north-america-187102751.html

Is India a reliable place to R&D cars?
I heard some jokes before that after Tata acquired Land Rover, it sent out its best engineers to UK to learn the technology. In the end they couldn't understand the technology.
I also heard 2 years ago that Tata motor's world's cheapest new car (less than $3000) had serious reliability problems and they had to stop production for it.

I hope Fiat is aware of that, and has a different way of quality control.

Wikipedia:

The automotive sector is prominent in Pune. It is home to the Automotive Research Association of India, which is responsible for the homologation of all vehicles available in India. All sectors of the automotive industry are represented, from two-wheelers and autorickshaws to cars, tractors, tempos, excavators and trucks. Automotive companies like Tata Motors, Mahindra & Mahindra, Mercedes Benz, Force Motors (Firodia-Group), Kinetic Motors have set ups in Pune. Automotive companies including General Motors, Volkswagen, and Fiat have set up greenfield facilities near Pune, leading The Independent to cite Pune as India's "Motor City".[44] Several automotive component manufacturers like Saint-Gobain Sekurit, TATA Autocomp Systems Limited, Robert Bosch GmbH, ZF Friedrichshafen AG, Visteon, and Continental Corporation are located here.

Can't speak to the jokes about Tata.
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on January 17, 2013, 06:02:18 PM
In defense of electric cars.
http://search.autonews.com/v/69860576/in-defense-of-electric-cars-1-17-13.htm?

Marchionne predicts fast rise for Jeep production in China.
http://www.autonews.com/article/20130117/ANE/301179800#ixzz2IHzRZOBS

PS: Where is Berlusconi when you need him?
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on January 17, 2013, 09:17:41 PM
This is big. Thanks txlaw.

Chrysler and Santander talking about establishing in-house financing arm.

http://online.wsj.com/article/SB10001424127887323968304578247842712019994.html

This is big indeed! In 2006 GM's most profitable unit was its financing unit. It does make sense for Chrysler to have such a unit too.
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on January 18, 2013, 10:34:30 AM
Great NPR interview: CEO Marchionne Drives Chrysler's Dramatic Turnaround.

http://www.npr.org/2013/01/18/169684984/ceo-marchionne-drives-chryslers-dramatic-turnaround
Title: Re: FIATY - Fiat S.p.A.
Post by: txlaw on January 18, 2013, 11:38:59 AM
Great NPR interview: CEO Marchionne Drives Chrysler's Dramatic Turnaround.

http://www.npr.org/2013/01/18/169684984/ceo-marchionne-drives-chryslers-dramatic-turnaround

Phenomenal interview.  Thanks for posting, Plan.
Title: Re: FIATY - Fiat S.p.A.
Post by: indirect on January 18, 2013, 12:38:03 PM
Great NPR interview

At the end of the interview,  Sergio talks about IPO. I had not thought of the possibility of a joint IPO/Fiat listing in US with some of the cash going to Veba trust and Fiat owing 100% of Chrysler.
It could be a win/win situation with Veba getting some cash and equity and Fiat would have less cash outlay.
However equity valuations are poor.

Sergio has a history of good capital allocation skill. We will see his financial engineering skill also.

Any thoughts ?
Title: Re: FIATY - Fiat S.p.A.
Post by: txlaw on January 18, 2013, 12:44:46 PM
Great NPR interview

At the end of the interview,  Sergio talks about IPO. I had not thought of the possibility of a joint IPO/Fiat listing in US with some of the cash going to Veba trust and Fiat owing 100% of Chrysler.
It could be a win/win situation with Veba getting some cash and equity and Fiat would have less cash outlay.
However equity valuations are poor.

Sergio has a history of good capital allocation skill. We will see his financial engineering skill also.

Any thoughts ?

I interpreted that exchange differently:

MONTAGNE: There is talk, now, of Chrysler going public, selling shares so that you might say any American can invest in Chrysler's success. Is that something you would look forward to?

MARCHIONNE: What I really would like to do is to give an opportunity to America investors to buy shares in the combined Fiat/Chrysler. How that happens, I don't know, so give me some time. I need to figure it out.


I thought he was implying that he doesn't want the IPO to go forward and, instead, wants Fiat to wholly own Chrysler and trade on the American exchanges. 
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on January 18, 2013, 12:54:22 PM
World Class Manufacturing aka Toyota Production System aka Lean Manufacturing in Jefferson. Wow. Kaizen.

http://www.chryslergroupllc.com/Investor/presentations/other/ChryslerDocuments/World_Class_Manufacturing.pdf

http://blog.chryslerllc.com/blog.do?p=entry&id=1359

http://www.youtube.com/watch?v=BNHT3kStYyM

http://en.wikipedia.org/wiki/Toyota_Production_System
Title: Re: FIATY - Fiat S.p.A.
Post by: LC on January 18, 2013, 05:07:04 PM
Great NPR interview

At the end of the interview,  Sergio talks about IPO. I had not thought of the possibility of a joint IPO/Fiat listing in US with some of the cash going to Veba trust and Fiat owing 100% of Chrysler.
It could be a win/win situation with Veba getting some cash and equity and Fiat would have less cash outlay.
However equity valuations are poor.

Sergio has a history of good capital allocation skill. We will see his financial engineering skill also.

Any thoughts ?

I interpreted that exchange differently:

MONTAGNE: There is talk, now, of Chrysler going public, selling shares so that you might say any American can invest in Chrysler's success. Is that something you would look forward to?

MARCHIONNE: What I really would like to do is to give an opportunity to America investors to buy shares in the combined Fiat/Chrysler. How that happens, I don't know, so give me some time. I need to figure it out.


I thought he was implying that he doesn't want the IPO to go forward and, instead, wants Fiat to wholly own Chrysler and trade on the American exchanges.

I share your perspective. That said, Fiat got a great deal in Chrysler. He obviously doesn't want to dilute or sell Fiat's stake, and how can I blame him?
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on January 19, 2013, 07:52:39 PM
Alfa Romeo brand to re-enter U.S. market in late 2013
http://www.autonews.com/article/20130119/RETAIL01/130119802#ixzz2IU5TADeB

The Alfa Romeo brand will re-enter the U.S. market late this year with its 4C sports car, Fiat-Chrysler CEO Sergio Marchionne said Friday.

Increasing Alfa's sales is a cornerstone of Marchionne's plan to cut losses at Fiat in Europe by 2015.

"For sure it's coming back this year with the 4C. With the Alfa Romeo 4C," Marchionne said after a speech to a Detroit businesswomen's group. "We are finalizing the car now, so it should be here this year."
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on January 21, 2013, 07:55:27 AM
Jeep is a monster brand, and now with global distribution.

"On the key products, I'm maxed out," Marchionne said in an interview. "We're investing now in de-bottlenecking all this. Anybody that supplies components to the Grand Cherokee is being pushed to increase capacity. Same thing with people that make Wrangler components."

Jeep set a global sales record last year of 701,626 units, besting the previous record of 675,494 set in 1999. But Marchionne said supplier constraints cost the company as many as 70,000 additional sales.

"I didn't sell all the Grand Cherokees I could have sold. I didn't sell all of the Wranglers that I could have sold because I couldn't make them. There was a natural limitation to my ability to compete," Marchionne said.

That will change in 2013, the CEO promised. Chrysler previously projected to deliver 2.6 million vehicles in 2013, up from 2.4 million in 2012. But Marchionne said adding another 200,000 units for the coming year is not enough. "We're going to try and push beyond 2.6 million in 2013. We've got a lot of work to do here, but the machine needs to be pushed," he said. "No vacations. No breaks."
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on January 21, 2013, 08:02:21 AM
Top Chrysler Group executives took responsibility for the 2013 Dodge Dart's sluggish sales start but said they have "a lot of levers" available to boost sales. The Dart compact sedan, developed jointly by Chrysler and Fiat, finished the year with 25,303 U.S. sales over seven months. Dealers complained last year that the first Darts had only manual transmissions, reducing the number of early shoppers they could take on test drives. Though a six-speed automatic transmission was available at dealerships weeks later, the optional European dual-dry clutch automatic gearbox in some Dart models did not meet American driving tastes.

Chrysler-Fiat CEO Sergio Marchionne, in an interview last week, took responsibility for the Dart's launch, saying the powertrain decisions were his. A new nine-speed automatic will be unavailable in the Dart until later this year at the earliest, he said. "I decided I was going to put a European transmission into the car because I was going to try to teach Americans how to get [better] fuel mileage," Marchionne said.

Dodge brand chief Reid Bigland said Dart sales could be better, but he's not worried. "I'm OK where I'm at because there are a lot of levers that are available to me to jolt that volume," Bigland said. He said Dart average transaction prices are "just shy of $22,000," and that incentives have been "very conservative."

Bigland urged patience, especially as the newly announced Dart GT, with a more powerful 2.4-liter engine and more standard features, begins production in April. Said Bigland: "This thing's headed in the right direction, but there are certainly some opportunities to continue that growth and a number of levers that have yet to be pulled."

Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on January 21, 2013, 08:10:46 AM
Chrysler near a deal for preferred lender http://www.autonews.com/article/20130121/RETAIL07/301219989#ixzz2IcvshShS

Marchionne said at the Detroit auto show last week that the agreement would allow Chrysler dealers to increase shoppers' leasing options, which in turn can boost vehicle sales by qualifying more consumers for financing.

"We understand that there's a piece of the market that we're not currently accessing," Marchionne said. "Whether we do it directly or 100 percent through a provider or in a combination with other sources, it really doesn't matter. But we'll be there."

Reid Bigland, head of U.S. sales, said Chrysler has some leasing programs in place but they account for only 10 to 13 percent of U.S. sales while the industry average is about 20 percent. "I think in any arrangement that we put forward, it will have a leasing element," he said. "How much leasing is just going to kind of depend on the dealers and the market."

The arrangement would only cover sales in the United States, not in Canada.

Under previous owner Cerberus Capital Management, Chrysler abruptly ended leasing in July 2008 when financing through Chrysler Financial, Chrysler's former captive finance arm, evaporated. Without leasing options, sales of Chrysler vehicles fell sharply.


Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on January 21, 2013, 01:53:46 PM

MILAN -- Chrysler Group expects to make at least 100,000 Jeeps in China soon after production starts in 2014, Reuters reported. Output could double quickly, Chrysler-Fiat CEO Sergio Marchionne said, without giving a precise time frame.

Chrysler, in which Fiat has a 59 percent stake, has agreed to make Jeeps in China with Guangzhou Automobile Group. "We expect production of around 100,000 Jeeps per year, which is expandable to 200,000," Marchionne said here at an industry conference, adding that production could start in 18 months.

In 2012, General Motors and Volks-wagen AG each sold more than 2.8 million cars in China, the world's largest vehicle market, together accounting for more than 29 percent of China's total vehicle sales of 19.3 million, according to consulting firm IHS Global Insight. Jeep, Chrysler and Fiat sold just over 60,000 cars in China last year
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on January 21, 2013, 02:49:56 PM
Good long article by the Financial Times on Fiat's plans. I would not have said "salvation" though.

Fiat looks to luxury for salvation
http://www.ft.com/intl/cms/s/0/b88c25e2-5b3c-11e2-8d06-00144feab49a.html#slide0

On its side, Fiat, with its expertise in small cars Punto and Panda, is seen as being in a position to benefit as the premium car market has moved down into smaller cars.

Maserati, which like Alfa Romeo has a strong but small fan base, stands a chance of enticing consumers with its promise of a price of $130,000 and engines made under the auspices of Ferrari – Fiat’s most exclusive marque – compared with a starting price of around $270,000 for a Ferrari 458 Italia

Fiat’s platform-sharing with Chrysler and the US group’s experience in making bigger cars is also considered an advantage, especially for the development of Alfa Romeo, which has consistently failed to live up to its promise in past relaunches. Chrysler’s success with Jeep is leading the way. It sold 700,000 cars in 2012, it was announced earlier this month, nearly doubling its sales in Asia.

Nonetheless, analysts say Mr Marchionne and his team are playing a high-stakes game in trying to develop a cadre of luxury car brands against the might of German carmakers in just a handful of years, a short timeframe for the premium segment.

Fiat wants to grow its sales of Maserati nearly 10-fold to 50,000 in the next three years, with 300,000 for Alfa Romeo. It planned to invest €7.5bn in 2012, €7.5bn to €8.5bn this year and €8.5 to €9.5bn in 2014 as it focuses on the shift into premium.

BMW started to build its premium brand reputation in the 1970s and 1980s. Audi’s shift to premium brand status took VW 15 years of investment to achieve, while it took a decade to turn around Porsche.

“It is about aspiration and premiumisation and branding and that takes a damn long time to build,” says an industry expert.

Another persistent concern is reaching consumers, especially in the US, which Alfa Romeo especially needs to crack if it is to stand any chance of success. Harald Wester, chief executive of Maserati, has said it would increase its dealerships worldwide to 425 by 2015, from 250 at the end of this year, but there is less confidence about Alfa Romeo.






Title: Re: FIATY - Fiat S.p.A.
Post by: meiroy on January 22, 2013, 07:14:45 AM

Any advantages to buying the ADR over FI.MI? FI.MI is far more liquid.
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on January 25, 2013, 10:18:16 AM

Fiat gets union agreement for layoff scheme at Melfi plant
http://www.autonews.com/article/20130125/ANE/301249696#ixzz2J0pjIBpm

Fiat has received trade unions' go-ahead for a layoff scheme at its Melfi plant in southern Italy that will allow it restructure the plant before producing a new Jeep and a Fiat model there.

Melfi, one of Fiat's most important facilities in Italy, makes the Punto model. Last December Fiat said it would invest 1 billion euros ($1.3 billion) to build a new entry-level Jeep and the Fiat 500X in Melfi starting in 2014.

[…]

The unions' approval, announced by union UGL in a statement, allows Fiat to press ahead with its plan to halt two production lines at the plant, starting from Feb. 11. The temporary layoff scheme can run until the end of 2014, but Fiat can restart production as soon as new lines are ready.

"Fiat said production could likely start at the end of 2013, early 2014," UGL's metalworkers regional secretary Giuseppe Giordano told Reuters after attending a meeting with Fiat.

On Jan. 15 Fiat said it wanted to continue producing the Punto at Melfi depending on market demand while investing in building two new models.



Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on January 25, 2013, 10:24:24 AM
Fiat 500X to take on Mini Countryman
http://www.topgear.com/uk/car-news/fiat-500x-fiat-500l-mini-2012-10-09


Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on January 25, 2013, 11:46:47 AM

Fiat gets union agreement for layoff scheme at Melfi plant
http://www.autonews.com/article/20130125/ANE/301249696#ixzz2J0pjIBpm

Fiat has received trade unions' go-ahead for a layoff scheme at its Melfi plant in southern Italy that will allow it restructure the plant before producing a new Jeep and a Fiat model there.

Melfi, one of Fiat's most important facilities in Italy, makes the Punto model. Last December Fiat said it would invest 1 billion euros ($1.3 billion) to build a new entry-level Jeep and the Fiat 500X in Melfi starting in 2014.

[…]

The unions' approval, announced by union UGL in a statement, allows Fiat to press ahead with its plan to halt two production lines at the plant, starting from Feb. 11. The temporary layoff scheme can run until the end of 2014, but Fiat can restart production as soon as new lines are ready.

"Fiat said production could likely start at the end of 2013, early 2014," UGL's metalworkers regional secretary Giuseppe Giordano told Reuters after attending a meeting with Fiat.

On Jan. 15 Fiat said it wanted to continue producing the Punto at Melfi depending on market demand while investing in building two new models.


Why do I have a feeling that the union president in Italy is easier and nicer to deal with than the one in Detroit? I read the book 'Once upon a car', and I feel it is a pain in the ass to deal with the union in Detroit.
Title: Re: FIATY - Fiat S.p.A.
Post by: jch548 on January 26, 2013, 06:04:53 AM
Also some Fiat shorts

Hedge Funds Jostling to Bet Against France's Peugeot






By Reuters







Friday, January 25, 2013

Email this story  |  News Tracker  |  Reprints  |  Printable Version

 








LONDON (Reuters)—Hedge fund short-sellers have hoovered up nearly all available shares in Peugeot in their scramble to bet the French carmaker will be an early victim in an industry struggling to overcome a collapse in European sales.
 Peugeot is now one of the most in-demand stocks in Europe for short-selling by hedge funds, with 92 percent of shares available to borrow — the "lending pool" supplied by institutional investors — now out on loan, according to data group Markit.
 
Such has been hedge funds' rush for Peugeot stock that prime brokers, who provide finance and lend stock to hedge funds, have had to meet some demand from their own supplies. The Peugeot lending pool amounts to 12 percent of the carmaker's €2.17 billion ($2.92 billion) market capitalization. In total 18 percent of Peugeot stock is now out on loan.
 
Short-sellers include hedge fund Marshall Wace, which holds a net short position of 0.76 percent of the carmaker's total share capitalization. Odey Asset Management holds 2.66 percent, Egerton Capital 0.7 percent and D.E. Shaw 1.4 percent, according to according to the most recent disclosures.
 
"The majority of the (Peugeot) lending pool has been borrowed, by a mixture of directional and event-driven funds, at which point stability becomes a potential concern," said Duncan Wilson, head of equity finance sales trading at JPMorgan prime brokerage.
 
In an auto market where demand is close to a 20-year low — and still falling — Peugeot has been one of the hardest hit by Europe's debt crisis and the ensuing austerity measures curbing consumer spending. The region accounted for 59 percent of its sales volume in 2012.
 
Once a star French brand, Peugeot is struggling with excess production capacity and mounting losses compounded by the protracted sales slump. It is cutting 10,000 jobs and has already required a capital increase, a €7 billion government loan guarantee and €1.5 billion in asset sales over the past year to stay afloat.
 
Now hedge funds are betting it will have to raise more money or be further damaged by the dire economic climate. Short-selling means borrowing stocks in the hope the share price will fall and enable the fund to buy them back profitably at a lower value.
 
However, some funds could have so far lost money on their positions. Peugeot shares, which rose above €7 in September, dropped below €4.5 last month but have since recovered to more than €6 on Friday [Jan. 25] along with a broader market move.
 
No one from Peugeot was immediately available to comment on the short-selling positions.
 
European demand is set to shrink another 1.7 percent this year to 17.8 million light vehicles according to consulting firm LMC Automotive. By comparison, the U.S. market is set to grow 4.2 percent to 15.1 million vehicles.
 
"It's appalling. In Europe it's terrible," Savvas Savouri, chief economist at London-based hedge fund firm Toscafund, told Reuters. His firm's short positions include U.S. carmaker General Motors, on the grounds its large European operations counter its exposure to better conditions at home.
 
GM expects losses for its European operation, which consists mainly of Opel and U.K.-based Vauxhall, of between $1.5 billion and $1.8 billion for 2012. GM took a 7 percent Peugeot stake in the French carmaker's March share issue.
 
After Peugeot, the other major European carmaker being targeted by hedge funds is Fiat. Levels of Fiat stock lending have more than doubled since the end of October — though some of this may have been driven by hedge funds borrowing the stock to give them the option to short, without actually placing the trade. Those levels fell back a little last month when Fiat CEO Sergio Marchionne said it had no need for a capital increase.
 
Fiat, which is trying to counter grim European numbers by increasing sales of its luxury Alfa Romeo brand in the U.S. and boosting growth in Asia and Latin America, saw its shares drop from around €4.8 in mid-September to around €3.4 at the end of November. They have since recovered to around €4.5.
 
Funds with short positions on Fiat include Brookside Capital Management and Pelham Long Short Master fund, according to the website of Italian regulator Consob, while Highbridge Capital is shorting tire maker Pirelli.
 
One of the biggest Fiat bears has been Chris Cooper-Hohn, head of activist hedge fund firm TCI, although the firm's position has since been closed, a spokeswoman said on Friday.
 
In November Mr. Cooper-Hohn told a conference in London: "It is a bad company. People look at the net debt of €5 billion, ex-Chrysler. We think the gross debt is what matters ... we think it could be nearer to €20 billion. We think Fiat needs to do a rights issues as soon as possible."
 
In total stock lending for the Euro Stoxx 600 Autos and Comp index rose to 4.28 percent last week, up from 3.81 percent at the end of October, according to Markit.
 
Though U.S. and Asian automakers have so far attracted mainly long positions by hedge funds — Toyota in particular has been boosted by a fall in the yen, reducing the price of its exports — some believe the industry's wider woes could throw up further trades.
 
"In Japan there will be opportunities to short soon," Toscafund analyst Takis Christodoulopoulos said.
 
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on January 26, 2013, 08:19:14 AM
jch548, most of these hedge funds merely do a pair trade. For example, long GM and short Fiat.
As David Einhorn said, he never does pair trades, because this would force him to long a long of 6 and 7 score longs, and short a lot of 3 and 4 score shorts.
Just because Fiat's short interest is high doesn't mean it is scored as 1 or 2. In fact I think with the robust US and Brazil market, it is actually a misunderstood stock that should be scored 8 or 9.
Title: Re: FIATY - Fiat S.p.A.
Post by: luck on January 28, 2013, 08:48:44 AM
everywhere i look in this burb i live in in california, i see fiat 500's.  not sure what's happening.  i believe thus far the fiat 500 has relatively low volume in america.  that said, it seems as if fiat's going to be building on this growth with the 500L and the 500L trekking in 2013.

Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on January 28, 2013, 09:07:49 AM
everywhere i look in this burb i live in in california, i see fiat 500's.  not sure what's happening.  i believe thus far the fiat 500 has relatively low volume in america.  that said, it seems as if fiat's going to be building on this growth with the 500L and the 500L trekking in 2013.

Same here. But we are in Cali. It is seeing a bunch of hybrids here but not so much in the middle of the county... we are not always representative for the rest of the country.
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on January 28, 2013, 09:12:27 AM
everywhere i look in this burb i live in in california, i see fiat 500's.  not sure what's happening.  i believe thus far the fiat 500 has relatively low volume in america.  that said, it seems as if fiat's going to be building on this growth with the 500L and the 500L trekking in 2013.

Same here. But we are in Cali. It is seeing a bunch of hybrids here but not so much in the middle of the county... we are not always representative for the rest of the country.

Yeah I saw a bunch of Fiat 500 in Seattle area too.
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on January 28, 2013, 09:17:13 AM
Same here. But we are in Cali. It is seeing a bunch of hybrids here but not so much in the middle of the county... we are not always representative for the rest of the country.

The new Ram will do OK in pickup country. Match made in heaven.
Title: Re: FIATY - Fiat S.p.A.
Post by: PLynchJr on January 28, 2013, 09:24:02 AM
Any noted value investors besides Guy Spier hold Fiat?
Title: Re: FIATY - Fiat S.p.A.
Post by: txlaw on January 28, 2013, 09:33:20 AM
Same here. But we are in Cali. It is seeing a bunch of hybrids here but not so much in the middle of the county... we are not always representative for the rest of the country.

The new Ram will do OK in pickup country. Match made in heaven.

It certainly will.  And, btw, I'm in Texas.

More anecdotal evidence: I see a lot more new Jeeps on the road now, particularly the four door Wrangler. 
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on January 29, 2013, 08:00:07 AM
Alfa Romeo.
http://www.bloomberg.com/news/2013-01-28/marchionne-plots-alfa-romeo-suv-as-fiat-losses-mount.html
http://www.autonews.com/article/20130129/ANE/301299959#ixzz2JNdIiaLh

MILAN (Bloomberg) -- Fiat Group plans to introduce the first Alfa Romeo SUV in the latest effort to transform the languishing nameplate into a global luxury brand to challenge Audi.

The SUV is slated to hit showrooms in 2015, said three people familiar with the matter, who asked not to be identified before a public announcement of the vehicle. The car, one of nine new Alfa models due to be rolled out over the next four years, is aimed at helping reach the brand's goal of tripling sales by 2016.

Alfa, a symbol of Italian auto styling and performance for decades, is the centerpiece of Fiat CEO Sergio Marchionne's strategy to end losses in Europe. Fiat's European turnaround plan calls for 16 upscale models to start production by 2016 at under-used assembly plants in Italy.

"Alfa is the only brand that can boost margins for the group," said Roberto Ferrari, owner of Fiat dealer Sprintauto, near Milan. If the right models get rolled out, "Alfa could become the Apple of the car industry. We just need our equivalent of the iPhone."

The new Alfa SUV, which could bolster a planned return to the United States this year after an absence of almost two decades, will be based on technology and parts used in the Dodge Dart, the people said. The model is set to be built at the Mirafiori plant near Fiat's headquarters in Turin, they added.

Alfa's image gives it potential to appeal to a global audience and charge higher prices for cars that share technology with mass-market models, lifting the group's profit like Audi does for Volkswagen

[…]

The SUV will face tough competition. BMW, which already has four SUVs, is developing the new X4. Mercedes-Benz is also planning a compact SUV to add to its lineup. At the upper end, VW's Lamborghini and Bentley are both developing SUVs.

[…]

Maserati and Chrysler's Jeep represent the other pillars of Marchionne's strategy to shift to higher-end cars. The goal is to reduce Fiat's reliance on Europe, where auto demand is headed for a sixth straight annual decline this year.

Total earnings before interest, taxes and one-time items, which Fiat calls trading profit, probably rose 57 percent to 3.75 billion euros on the first full year of contributions from Chrysler, according to a Bloomberg survey of 16 analyst estimates. Intesa's Bosio estimates that 3.03 billion euros came from Chrysler, which Fiat controls.

Fiat shares have risen 25 percent this year, to 4.72 euros, giving the company a market value of 5.9 billion euros.

[…]

Alfa carries most of the weight of the turnaround, with the company planning to invest 1 billion euros from 2012 to 2014 to transform Alfa into a global premium brand. Fiat Group is aiming for deliveries of more than 300,000 vehicles from Alfa by 2016, compared with 50,000 Maseratis by 2015.

Alfa's potential is based on an image stemming from luxury cars in the 1930s and racing success in the 1950s. The brand became part of pop culture when Dustin Hoffman drove a Duetto Spider in the film "The Graduate" in the 1960s.

The reputation hasn't translated into commercial success. A lack of recent investment in new models and little exposure to markets outside Europe caused sales to slump to 101,000 vehicles last year, about half the 2001 peak. Audi, which makes three SUVs, sold 1.45 million autos last year.

The 4C sports car, which will go on sale in Europe and the United States this year, marks the start of "the resurrection of Alfa," Marchionne told reporters this month in Detroit. The next steps in Alfa's turnaround include a full-sized sedan based on the Maserati Ghibli and the mid-sized Giulia sedan and wagon, which could be built at Fiat's Cassino plant near Rome, two of the people said.

A new version of the roadster featured in "The Graduate" will be made in Japan starting in 2015 in a partnership with Mazda Motor Corp.

Alfa showed an SUV concept in 2003 that was never built, and since taking over Fiat in 2004, Marchionne has twice failed to meet targets of selling more than 300,000 Alfas annually. In 2007, he said the target could be met in 2010, while three years ago, he aimed to increase sales to about 400,000 in 2013. Marchionne's latest effort could again fall short.

Researcher IHS Automotive predicts Alfa sales will rise to 231,300 cars by 2016, 23 percent shy of the CEO's target. "You always have to take Marchionne's forecast with a pinch of salt," said Ian Fletcher, an IHS analyst in London. "He has to find customers who will decide to leave Audi, BMW or Mercedes to drive an Alfa, which is a tremendous brand but it has to prove it will offer a complete lineup."
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on January 29, 2013, 01:02:02 PM
Alfa Romeo.
http://www.bloomberg.com/news/2013-01-28/marchionne-plots-alfa-romeo-suv-as-fiat-losses-mount.html
http://www.autonews.com/article/20130129/ANE/301299959#ixzz2JNdIiaLh


"Fiat has said it needs to fix its European business before finalizing a planned merger with Chrysler Group. "

Any thoughts on that, plan?
If it acquires Chrysler before fixing Europe, isn't it cheaper to do so? That would make Fiat's own EBITDA multiple to be compressed.
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on January 29, 2013, 06:34:25 PM
"Fiat has said it needs to fix its European business before finalizing a planned merger with Chrysler Group. "

Any thoughts on that, plan?
If it acquires Chrysler before fixing Europe, isn't it cheaper to do so? That would make Fiat's own EBITDA multiple to be compressed.

http://www.bloomberg.com/news/2012-10-30/fiat-chrysler-merger-takes-backseat-to-europe-fix.html
Title: Re: FIATY - Fiat S.p.A.
Post by: LC on January 30, 2013, 07:44:08 AM
Fiat approves 5bln Euro bond issue: http://www.reuters.com/finance/stocks/FIATY.PK/key-developments/article/2683318

Fiat declines 2012 dividend payment to improve liquidity (and b/c Chrysler restrictions): http://www.reuters.com/finance/stocks/FIATY.PK/key-developments/article/2683275
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on January 30, 2013, 07:57:30 AM
2012 Results Presentation including new product pipeline and 2013 guideline.
http://www.chryslergroupllc.com/Investor/presentations/QAWebcasts/ChryslerDocuments/Q4_2012_Presentation.pdf

Chrysler's revised product plan bolsters Fiat brand in U.S.
http://www.autonews.com/article/20130130/OEM04/130139993#ixzz2JTSouiZm

The revised strategy contains changes for each brand Chrysler sells in North America. It shows the addition of seven new unannounced vehicles for the Fiat brand in 2015 and 2016, as well as a single Alfa Romeo, believed to be the 4C sports coupe, arriving this year. There are five additional unidentified new Alfa's planned to arrive in 2015 and 2016, the plan indicates.

Chrysler: Three Chrysler vehicles that were to be built by Fiat in 2012 and 2013 have been dropped from the previously released plan. One existing Chrysler vehicle -- likely the 200 sedan -- will be refreshed in 2014, and three new vehicles are to arrive for the brand in 2015.

Jeep: The addition of a small Jeep built by Fiat has been delayed one year until 2014. Two new Jeep products will be introduced in 2015, including one vehicle -- likely the previously discussed 7-passenger Grand Wagoneer -- which is delayed two years. The brand will refresh two of its products in 2016.

Ram: A Fiat-built Ram -- likely a rebadged Fiat Doblo small commercial van -- has been delayed two years from the previous product plan and will appear in 2014. Two new Rams are now scheduled to appear in 2016.

Dodge: While two previous Fiat-produced Dodge vehicles have been dropped, three existing vehicles in the brand will receive previously unscheduled refreshes -- one this year and two in 2014. Another existing unidentified vehicle will get a new platform in 2015, and the brand will add another vehicle to its lineup in 2016.

SRT: Chrysler Group's performance brand won't get another new vehicle in its lineup until 2016, but will get new refreshes of three existing vehicles in 2014. The Viper, released last year, will next be refreshed in 2015.
Title: Re: FIATY - Fiat S.p.A.
Post by: luck on January 30, 2013, 08:46:36 AM
fiaty pulling back significantly on news after long runup.  it seems to me to be a great, but messy, opportunity at these prices.
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on January 30, 2013, 11:17:53 AM
Fiat approves 5bln Euro bond issue: http://www.reuters.com/finance/stocks/FIATY.PK/key-developments/article/2683318

Fiat declines 2012 dividend payment to improve liquidity (and b/c Chrysler restrictions): http://www.reuters.com/finance/stocks/FIATY.PK/key-developments/article/2683275

Is this a signal that it would like to buyout the minority Chrysler stakes now? Is it more advantageou to do the full integration now or later?
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on January 30, 2013, 11:56:12 AM
Fiat approves 5bln Euro bond issue: http://www.reuters.com/finance/stocks/FIATY.PK/key-developments/article/2683318

Fiat declines 2012 dividend payment to improve liquidity (and b/c Chrysler restrictions): http://www.reuters.com/finance/stocks/FIATY.PK/key-developments/article/2683275

Is this a signal that it would like to buyout the minority Chrysler stakes now? Is it more advantageou to do the full integration now or later?


Fiat said its board had proposed suspending a dividend payment because of its desire to keep a high level of liquidity, which reached €20.8 billion at the end of 2012.

"It is purely prudence to extend our cash requirements (in the event that we reach an agreement to buy) some or all of [the trust's] interest in Chrysler," Mr. Marchionne told analysts on a conference call. "It is my objective that Fiat and Chrysler become a combined corporate entity."

Fiat and a United Auto Workers' retiree trust, which holds a 41.5% stake in Chrysler, are at loggerheads over the valuation of a call option Fiat tried to exercise last July to buy a 3.3% stake in the U.S. company. Fiat offered the trust, called a Voluntary Employee Beneficiary Association, $139.7 million last year to buy the stake. Fiat has since proposed paying $198 million for another 3.3% stake. The VEBA responded to Fiat's suit over the initial 3.3% stake by asking for about $343 million.

http://professional.wsj.com/article/SB10001424127887323701904578273823001741466.html?mod=WSJ_business_whatsNews&mg=reno64-wsj (http://professional.wsj.com/article/SB10001424127887323701904578273823001741466.html?mod=WSJ_business_whatsNews&mg=reno64-wsj)
Title: Re: FIATY - Fiat S.p.A.
Post by: LC on January 30, 2013, 11:56:46 AM
Fiat approves 5bln Euro bond issue: http://www.reuters.com/finance/stocks/FIATY.PK/key-developments/article/2683318

Fiat declines 2012 dividend payment to improve liquidity (and b/c Chrysler restrictions): http://www.reuters.com/finance/stocks/FIATY.PK/key-developments/article/2683275

Is this a signal that it would like to buyout the minority Chrysler stakes now? Is it more advantageou to do the full integration now or later?
I'm not sure what their intentions are. Marchionne says they want to "fix Europe" first before going after Chrysler - plus there is still the issue of what price they need to to acquire the minority stake. But I'm not sure what they need the cash for in the meantime. I think it makes more sense to acquire Chrysler and then figure out what to do in Europe.
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on January 30, 2013, 01:57:28 PM
Fiat approves 5bln Euro bond issue: http://www.reuters.com/finance/stocks/FIATY.PK/key-developments/article/2683318

Fiat declines 2012 dividend payment to improve liquidity (and b/c Chrysler restrictions): http://www.reuters.com/finance/stocks/FIATY.PK/key-developments/article/2683275

Is this a signal that it would like to buyout the minority Chrysler stakes now? Is it more advantageou to do the full integration now or later?
I'm not sure what their intentions are. Marchionne says they want to "fix Europe" first before going after Chrysler - plus there is still the issue of what price they need to to acquire the minority stake. But I'm not sure what they need the cash for in the meantime. I think it makes more sense to acquire Chrysler and then figure out what to do in Europe.

http://www.sec.gov/Archives/edgar/data/1513153/000119312511078025/dex991.htm
This is the formal doc for that call option agreement.
I saw earlier from a news reporter that Fiat also has the option to buy all of VEBA's stakes at $5.5 billion. But I couldn't find it from this doc. I think if that is true, then this action makes a lot of sense. They raised 5 billion euro so they could buy out Chrysler from VEBA, and use the remaining cash for other purposes.
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on January 30, 2013, 03:38:15 PM
Ferrari to Help Alfa Romeo Prepare for Return to U.S.
http://blogs.wsj.com/drivers-seat/2013/01/30/ferrari-to-help-alfa-romeo-prepare-for-return-to-u-s/

Analysts Reaction: Concern over future cash generation, product delays, margins
http://www.autonews.com/article/20130130/OEM/130139991#ixzz2JVNB3U2P

We have been bullish on Chrysler since Fiat took an interest in 2009. This was the first quarter we have been disappointed. Operating profit missed our estimate by 15 percent, despite over-production of 78,000 units. The Dart has disappointed, and 8 products have been delayed by at least a year versus the original plan. Meanwhile competition from both the Japanese and VW will get much tougher in 2013-15. We also stick to our view that Fiat does not currently have sufficient capital to fully buy out Chrysler - an event central to any bull-case on Fiat Auto in our view."

-- Morgan Stanley analyst Stuart Pearson

Title: Re: FIATY - Fiat S.p.A.
Post by: jch548 on January 30, 2013, 05:45:21 PM
If Fiat can break-even in 2014 which might be a big if, Fiat's consolidated net after tax including Chrysler could approach 2.5B euros. Their market cap is only around 5b euros.
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on January 30, 2013, 06:12:44 PM
If Fiat can break-even in 2014 which might be a big if, Fiat's consolidated net after tax including Chrysler could approach 2.5B euros. Their market cap is only around 5b euros.

Just a reminder of Fiat Brazil and its 10% margins. Fiat ex-Chrysler operating margin is positive and consolidating Chrysler's balance sheet would help a lot..

(http://farm9.staticflickr.com/8473/8430671557_276e38388b.jpg)

http://www.fiatspa.com/it-IT/investor_relations/investors/risultati_trimestrali/FiatDocuments/2012/Q4_FY_2012_Results_Review.pdf (http://www.fiatspa.com/it-IT/investor_relations/investors/risultati_trimestrali/FiatDocuments/2012/Q4_FY_2012_Results_Review.pdf)

Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on January 30, 2013, 06:52:49 PM
Ferrari to Help Alfa Romeo Prepare for Return to U.S.
http://blogs.wsj.com/drivers-seat/2013/01/30/ferrari-to-help-alfa-romeo-prepare-for-return-to-u-s/

Analysts Reaction: Concern over future cash generation, product delays, margins
http://www.autonews.com/article/20130130/OEM/130139991#ixzz2JVNB3U2P

We have been bullish on Chrysler since Fiat took an interest in 2009. This was the first quarter we have been disappointed. Operating profit missed our estimate by 15 percent, despite over-production of 78,000 units. The Dart has disappointed, and 8 products have been delayed by at least a year versus the original plan. Meanwhile competition from both the Japanese and VW will get much tougher in 2013-15. We also stick to our view that Fiat does not currently have sufficient capital to fully buy out Chrysler - an event central to any bull-case on Fiat Auto in our view."

-- Morgan Stanley analyst Stuart Pearson


Plan, I tried to figure the VEBA-Fiat deal for quite a while but still couldn't understand it. Could you please help me take a look?

http://www.sec.gov/Archives/edgar/data/1513153/000119312511078025/dex991.htm
This is the formal doc for that call option agreement.
I saw earlier from a news reporter that Fiat also has the option to buy all of VEBA's stakes at $5.5 billion. But I couldn't find it from this doc. I think if that is true, then this action makes a lot of sense. They raised 5 billion euro so they could buy out Chrysler from VEBA, and use the remaining cash for other purposes.
Title: Re: FIATY - Fiat S.p.A.
Post by: jch548 on January 31, 2013, 04:47:18 AM
The employees want to IPO chrysler so they can set a better price. There is some issue if they can demand this but Sergio seemed to acquiese to this.

This could end up looking like Renault and Nissan where Renault's market value is less than their value of Nissan shares.
Title: Re: FIATY - Fiat S.p.A.
Post by: txlaw on January 31, 2013, 09:24:32 AM
AutoNation CEO on record results:
http://video.cnbc.com/gallery/?play=1&video=3000143937
Title: Re: FIATY - Fiat S.p.A.
Post by: txlaw on January 31, 2013, 09:31:31 AM
AutoNation CEO on record results:
http://video.cnbc.com/gallery/?play=1&video=3000143937

Notice the shout out to Chrysler.
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on January 31, 2013, 09:48:51 AM
Notice the shout out to Chrysler.

Oh my god, is that Nardelli? Auch!

RR: Yes he is, and talking about McNerney and Boeing. http://video.msnbc.msn.com/cnbc/50651013/#50651013
Title: Re: FIATY - Fiat S.p.A.
Post by: txlaw on January 31, 2013, 10:31:48 AM
Notice the shout out to Chrysler.

Oh my god, is that Nardelli? Auch!

RR: Yes he is, and talking about McNerney and Boeing. http://video.msnbc.msn.com/cnbc/50651013/#50651013

Haha, yeah.
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on January 31, 2013, 11:37:32 AM
Ferrari to Help Alfa Romeo Prepare for Return to U.S.
http://blogs.wsj.com/drivers-seat/2013/01/30/ferrari-to-help-alfa-romeo-prepare-for-return-to-u-s/

Analysts Reaction: Concern over future cash generation, product delays, margins
http://www.autonews.com/article/20130130/OEM/130139991#ixzz2JVNB3U2P

We have been bullish on Chrysler since Fiat took an interest in 2009. This was the first quarter we have been disappointed. Operating profit missed our estimate by 15 percent, despite over-production of 78,000 units. The Dart has disappointed, and 8 products have been delayed by at least a year versus the original plan. Meanwhile competition from both the Japanese and VW will get much tougher in 2013-15. We also stick to our view that Fiat does not currently have sufficient capital to fully buy out Chrysler - an event central to any bull-case on Fiat Auto in our view."

-- Morgan Stanley analyst Stuart Pearson


Plan, I tried to figure the VEBA-Fiat deal for quite a while but still couldn't understand it. Could you please help me take a look?

http://www.sec.gov/Archives/edgar/data/1513153/000119312511078025/dex991.htm
This is the formal doc for that call option agreement.
I saw earlier from a news reporter that Fiat also has the option to buy all of VEBA's stakes at $5.5 billion. But I couldn't find it from this doc. I think if that is true, then this action makes a lot of sense. They raised 5 billion euro so they could buy out Chrysler from VEBA, and use the remaining cash for other purposes.

No body seems to be interested in reading these sec filings?
I read that again and again, and I think I probably have understood it. Please correct me if I am wrong. :)
There is no outright price to buyout all of VEBA's stakes at $5.5 billion. Instead the price is the same as if Chrysler buys 3.3% chunk every 6 months. If this is the case, then I don't understand why Fiat doesn't buy out all of the VEBA stakes now, because Chrysler will probably do well in 2013 and increase its EBITDA.

Perhaps Marchionne's recent announcement to delay and cut some Chrysler products is on purporse to decrease its EBITDA so that Fiat can acquire the stakes cheaply? ::)
Title: Re: FIATY - Fiat S.p.A.
Post by: jch548 on January 31, 2013, 05:52:07 PM
There were a few articles in the financials today regarding Fiat. Sergio is aiming for Fiat to breakeven in europe in 2016 now. Probably looking at net debt increasing at Fiat the next couple of years with the investments they are making.

It was also mentioned that Veba had excersised an option to have Chrysler IPO instead of selling the rest to Fiat. Sergio said he still wants to buy the rest of Chrysler. The Veba option creates a problem. This might be litigated. I wouldn't count on Fiat picking up the rest of Chrysler.

It's kind of funny but Chrysler could IPO and then rescue Fiat in a takeover as the two comanies would be so intertwined. The tables will have turned.
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on January 31, 2013, 08:25:12 PM
There were a few articles in the financials today regarding Fiat. Sergio is aiming for Fiat to breakeven in europe in 2016 now. Probably looking at net debt increasing at Fiat the next couple of years with the investments they are making.

It was also mentioned that Veba had excersised an option to have Chrysler IPO instead of selling the rest to Fiat. Sergio said he still wants to buy the rest of Chrysler. The Veba option creates a problem. This might be litigated. I wouldn't count on Fiat picking up the rest of Chrysler.

It's kind of funny but Chrysler could IPO and then rescue Fiat in a takeover as the two comanies would be so intertwined. The tables will have turned.

Some analysts said that there would not be the real IPO.
VEBA's only negotiation leverage is to put this in IPO, but who is interested in being a minority shareholder of Chrysler? Even if someone on Wall Street buys all the IPO shares, their voice could still be ignored completely because they still don't have control of the company. Also Fiat could threaten to walk away from Chrysler if the IPO happens, and investment bankers knows that their hard work cannot bring them profits. Instead it is more likely just to be a negotiation leverage for VEBA. They won't work hard for the IPO.
I think there is a higher chance for the issue to be resolved this year than the actually IPO.

Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on February 01, 2013, 08:57:22 AM
 http://www.autonews.com/article/20130201/RETAIL01/130129902#ixzz2JfRF3vNz

Chrysler's sales were led by Dodge, where volume rose 37 percent, and Fiat, with deliveries rising 31 percent.

Chrysler said its car sales, led by the Dodge Avenger and Dart, and the Fiat 500 line, were up 50 percent, while light-truck deliveries increased 3 percent. Sales of the Dart totaled 7,154, the car's best month since its June launch, Chrysler said.

Jeep sales dropped 4 percent. It was the fourth consecutive monthly sales decline for Jeep and reflects the discontinuation of the Liberty SUV.

Chrysler's U.S. sales have now advanced 34 consecutive months, helping the company gain U.S. market share. It is one month short of matching the 35-month sales streak produced in the period ending December 1994.

The company has benefited from new models, fleet shipments and some of the highest incentives in the industry.

"Entering 2013 our product portfolio has never been stronger," Reid Bigland, head of U.S. sales operations for Chrysler, said in a statement.
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on February 01, 2013, 10:34:54 AM
Italy January New Car Registrations Fall 17.6%.
http://www.4-traders.com/FIAT-SPA-69342/news/Italy-Jan-New-Car-Registrations-Fall-17-6-Official-15989769/


Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on February 02, 2013, 11:28:21 AM
Ferrari to help Alfa Romeo on engines
http://europe.autonews.com/apps/pbcs.dll/article?AID=/20130130/ANE/130139986/ferrari-to-help-alfa-romeo-on-engines-marchionne-says#axzz2JlsXW8X3

Fiat SpA will announce within a month a technical cooperation between its Ferrari and Maserati subsidiaries on engine work aimed at rebuilding the Alfa Romeo brand. "Ferrari will take a more active role in engine development for Alfa, similar to what Ferrari already did for Maserati," Fiat-Chrysler CEO Sergio Marchionne said Wednesday in a call with analysts. Marchionne added that "engines worth wearing the Alfa badge" remain the biggest issue he is facing in reviving the sports-car brand.

After struggling for years to relaunch Alfa, Marchionne in November announced a new plan, calling for nine new-model introductions from 2013 through 2016. He hopes to triple Alfa sales to 300,000 units annually in 2016, from about 100,000 last year.

Marchionne said Alfa is currently working on the development of three new products, in addition to the brand's three existing models. A Fiat spokesman told Automotive News Europe that Marchionne was referring to the mid-sized Giulia sedan and wagon and a two-seat, rear-wheel-drive roadster.

The Giulia variants, set to replace the Alfa 159 discontinued at the end of 2011, are due to debut in Europe in 2014 and in the United States in 2015. The Giulia models will be built in Cassino, central Italy. The factory already builds the Giulietta compact for Alfa as well as the Delta for Lancia and the Bravo for Fiat.

The Alfa roadster will be built by Mazda Motor Corp. in Hiroshima, Japan, together with the replacement of the MX-5 roadster, starting in 2015.

The spokesman added that the Alfa 4C limited-edition coupe, unveiled as a concept car at the Geneva auto show in March 2011, is already considered part of the existing Alfa range. The others are the MiTo subcompact and Giulietta compact. The 4C will go on sale by the end of the year in Europe and the United States. Production is planned at 2,500 units a year. Of those, 1,000 would be bound for Europe and the United States each; the balance would be sold in the rest of the world.
Title: Re: FIATY - Fiat S.p.A.
Post by: paologorgo on February 03, 2013, 09:34:39 AM
Marchionne's interview with the editor of the Italian newspaper Repubblica (in Italian):

http://video.repubblica.it/dossier/repubblica-delle-idee-2013




Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on February 03, 2013, 09:53:38 AM
Marchionne's interview with the editor of the Italian newspaper Repubblica (in Italian):

http://video.repubblica.it/dossier/repubblica-delle-idee-2013

  • merger with Chrysler by 2014
  • Alfa is not for sale


That's fantastic Paolo. Time to practice the italiañol. A report in english.

http://www.4-traders.com/FIAT-SPA-69342/news/Fiat-CEO-Aims-To-Reach-Chrysler-Stake-Price-Deal-By-2014-16006296/
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on February 03, 2013, 07:53:20 PM
Olivier Francois for the win, third year in a row.

http://www.youtube.com/watch?feature=player_embedded&v=AMpZ0TGjbWE
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on February 04, 2013, 04:11:45 PM
http://professional.wsj.com/article/SB10001424127887323807004578281962449903522.html?mod=business_newsreel&mg=reno64-wsj (http://professional.wsj.com/article/SB10001424127887323807004578281962449903522.html?mod=business_newsreel&mg=reno64-wsj)

Fiat Aims to Close Chrysler Deal Next Year


Fiat SpA's F.MI -5.44%chief executive said he expected to complete the acquisition of Chrysler Group LLC next year, once the Italian auto maker reached a price agreement for the remaining stake in its U.S. unit.

"We will resolve it in 2014," Sergio Marchionne said at a forum Sunday in Fiat's hometown of Turin, where he was being interviewed by an editor of la Repubblica, the newspaper hosting the event. Fiat and a United Auto Workers union retiree trust that owns 41.5% of Chrysler disagree on the value of an option that Fiat exercised last July to buy a 3.3% stake in Chrysler. They have gone to court to resolve the issue.

Fiat offered the trust, called the Voluntary Employee Beneficiary Association, $139.7 million to buy the stake, and has since proposed paying $198 million for another 3.3% stake. But the trust wants about $343 million for the first stake.

Mr. Marchionne earlier set 2015 as the deadline for completing the acquisition. Fiat's gradual takeover of Chrysler is helping to increase the auto maker's economies of scale to better compete globally.

The Italian company is developing new models with Chrysler for several brands, as well as sharing parts, platforms and plants to become a more efficient manufacturer. Fiat also is taking advantage of Chrysler's dealership network in the U.S. to sell its own cars and reduce its exposure to the dismal European market, where its mass-market brands such as Fiat had operating losses of more than €700 million, or about $950 billion, last year.

Mr. Marchionne is overseeing a plan to revive Fiat's underused manufacturing base in Italy by exporting cars from its premium brands, Maserati and Alfa Romeo, to the U.S., where demand is gaining strength. His plan also focuses on the utilitarian side of the auto maker's namesake Fiat brand, represented by the Panda hatchback, which is sold in Europe.

"We'll probably do another Panda—a Panda X—one that would be a little longer," he said.

Mr. Marchionne said Fiat was considering making a car to respond to the growing market for low-cost models, where Renault SA RNO.FR -3.28%has succeeded with its Dacia brand in Europe. But he said such a car wouldn't be made in Italy.

He said the premium end of the U.S. market, coveted by competitors such as BMW AG BMW.XE -3.29%and Volkswagen AG's VOW3.XE -3.62%Audi, had yet to become saturated.

Mr. Marchionne last Wednesday attended the opening of a plant near Turin, where Maserati will make two new models for the U.S., its biggest market. "If we're intelligent, we will do something very, very different than the Germans in America," he said at the forum.

Mr. Marchionne said Fiat's Mirafiori plant in Turin would be the next one dedicated to making premium cars. He declined to elaborate, but union officials have said that one of the models would be a new sport-utility vehicle for Maserati.

Mr. Marchionne also confirmed plans for Alfa Romeo to return to the U.S. late this year with a two-seater 4C. He said it would be followed by a second model in 2014. "They're arriving, one at a time," he said, before reiterating his refusal to sell the brand to VW, despite the German auto maker's interest.

Mr. Marchionne acknowledged the disadvantage of exporting cars to the U.S., saying it added about €1,000 a vehicle in costs.

Fiat hopes to mitigate that cost by exporting only premium cars, which are more profitable than their mass-market counterparts.

Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on February 05, 2013, 08:00:52 AM
Berlusconi Rides Monte Paschi Scandal, Balotelli Signing to Surge.
http://go.bloomberg.com/euro-crisis/2013-02-05/berlusconi-rides-monte-pachi-scandal-balotelli-signing-to-surge/

Politics is back on the agenda for investors.
http://video.ft.com/v/2143159545001/Is-RoRo-mode-back-on-
Title: Re: FIATY - Fiat S.p.A.
Post by: paologorgo on February 05, 2013, 10:06:12 AM
There is, unfortunately, a "country risk" involved in investing in some Italian companies.
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on February 05, 2013, 12:50:40 PM
I have initiated coverage on Fiat as of today, so hopefully I will have something useful to say after the weekend!

Do you guys have any "must reads" apart from those mentioned in the thread? These already give some very nice info but I want to do a lot of extra digging.

Which probability do you guys assess for Fiat having FCF > 0 from 2014 and onwards?

http://www.youtube.com/watch?v=h3ppoyWNN7s (not sure whether it was mentioned here)

I like the quote:

"The chairmans office is empty now.
- Why did you leave?
Because nothing happens there"

Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on February 06, 2013, 01:02:24 PM
Alfa Romeo is clearly a cult brand: selling despite three decades of crappy products. Waiting for the 4C. (http://www.topgear.com/uk/car-news/alfa4c)

VW's Piech says automaker may add a 13th brand
http://www.bloomberg.com/news/2013-02-06/vw-chairman-suggests-not-done-adding-brands-after-porsche.html

The automaker is looking at starting a budget brand for emerging markets and a decision could be made on that this year, VW said last month at the Detroit auto show.

Piech and other Volkswagen executives have also voiced interest in buying Fiat's Alfa Romeo, which Fiat CEO Sergio Marchionne reiterated last week isn't for sale. Piech described Alfa Romeo as a "cult brand" in the ADAC Motorwelt interview.

Volkswagen has been on a shopping spree in recent years. The most recent additions to its stable were German truckmaker MAN, Italian motorbike producer Ducati and sports-car brand Porsche
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on February 06, 2013, 01:16:37 PM
Chrysler reaches deal making Santander preferred lender in U.S.
http://www.autonews.com/article/20130206/RETAIL/302069771#ixzz2K9izwGbg

Chrysler said its agreement with Santander is for 10 years. Santander will create a separate business unit as part of the deal that also will provide financing for dealership construction, real estate, working capital and revolving lines of credit.

Santander will provide Chrysler with a nonrefundable upfront payment and a quarterly share of revenues, according to the statement, which did not provide specifics.
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on February 06, 2013, 01:21:41 PM
Thanks for that latest news!

Is there some type of filing (that they do, or will do) for that financing unit?
Title: Re: FIATY - Fiat S.p.A.
Post by: claphands22 on February 07, 2013, 10:44:59 AM
What equity value agreement is right? (1) The Call Option Agreement that calls for Investment banks to come up with a valuation if the parties don't agree or (2) the one mentioned in Chrysler's 10k?

(1) Call Option Agreement Regarding Equity Securities of Chrysler Group LLC
. Annex C. Determination of Company Equity Value. Page C-1.
http://www.sec.gov/Archives/edgar/data/1513153/000119312511078025/dex992.htm  (http://www.sec.gov/Archives/edgar/data/1513153/000119312511078025/dex992.htm)

Quote
The Company Equity Value used to determine the Pre-IPO Call Option Exercise Price will be determined through the following process:
 
    (i)   For a period of ten Business Days from the date of delivery of the Notice of Exercise (the “Discussion Period”), Fiat and US Treasury shall negotiate exclusively with one another, in good faith, in order to agree on the Company Equity Value.
 
    (ii)   In the event that the parties do not agree on the Company Equity Value pursuant to clause (i) above, within two Business Days of the end of the Discussion Period, Fiat, first, and US Treasury, second, shall each appoint (the date of the first such appointment being the “Appointment Date”) an internationally recognized investment banking firm (an “Appointed Bank”) and the Appointed Banks shall mutually appoint an additional internationally recognized investment banking firm (the “Independent Bank”, and, together with the Appointed Banks, the “Investment Banks”).
 
    (iii)   Each Investment Bank shall separately determine its best estimate of the Company Equity Value, based on the customary methodologies that such Investment Bank in its professional experience deem relevant to such a determination, and governed by the principle that the Company Equity Value determined by each such Investment Bank must be, in such firm’s opinion, fair, from a financial point of view, to each of Fiat and the US Treasury in the context of the general economic and industrial conditions prevailing at the time of such determination.
 
    (iv)   Each such Investment Bank shall conduct customary due diligence and the parties shall each cooperate with the Investment Banks in making information available to assist in this due diligence.
 
    (v)   Each Appointed Bank shall present its final determination of Company Equity Value to the parties no later than 20 Business Days after the Appointment Date, by simultaneously presenting to Fiat and US Treasury its determination of Company Equity Value.
 
    (vi)   In the event the Company Equity Values determined by the two Appointed Banks are within 10% of one another (determined by reference to the higher of the two), the Company Equity Value shall be the average of those two estimates and such determination of Company Equity Value shall be final and binding on the parties.
 
    (vii)   In the event the Company Equity Values determined by the two Appointed Banks are not within 10% of one another (determined by reference to the higher of the two), the Independent Bank shall present its valuation. The Company Equity Value shall then be determined by the Independent Bank, calculated as an amount equal to the average of the Company Equity Values determined by those two Investment Banks the estimates of which are numerically closest to one another, and such resulting determination shall be final and binding on the parties.

(2) Chrysler 2011 10K, pg 264
http://www.sec.gov/Archives/edgar/data/1513153/000119312512099069/d292973d10k.htm (http://www.sec.gov/Archives/edgar/data/1513153/000119312512099069/d292973d10k.htm)

Quote
VEBA Trust Call Option. The VEBA Trust has granted Fiat a call option on a portion of the Class A Membership Interests held by the VEBA Trust. The price of the membership interests acquired in connection with the exercise of the call option will depend on whether or not we have completed a Chrysler Group IPO at the time the option is exercised. If a Chrysler Group IPO has not occurred, the exercise price for this option is determined using a defined market-based multiple, not to exceed Fiat’s multiple, applied to our reported net income (loss) before interest expense, income tax expense, depreciation and amortization or property, plant and equipment and intangible assets, or EBITDA, for the most recent four quarters less our net industrial debt. If exercised contemporaneously with a Chrysler Group IPO, the exercise price for this option will be equal to the initial public offering price. Subsequent to a Chrysler Group IPO, the exercise price is determined by reference to a volume-weighted average price per share of our common stock. The call option is exercisable from July 1, 2012 to June 30, 2016, provided that it covers 40 percent of the membership interests currently held by the VEBA Trust, less any membership interests previously transferred under the equity recapture agreement described below, and may be exercised for no more than 8 percent of such membership interests in any six month period.

Equity Recapture Agreement. On July 21, 2011, Fiat acquired the U.S. Treasury’s rights under the equity recapture agreement between the U.S. Treasury and the VEBA Trust for $75 million, of which $15 million was paid to the Canadian Government pursuant to a separate arrangement between the U.S. Treasury and the Canadian Government. The equity recapture agreement provides rights to the economic benefit associated with the membership interests held by the VEBA Trust in excess of a threshold amount of $4.25 billion plus 9 percent per annum from January 1, 2010, less any proceeds, including certain distributions, previously received by the VEBA Trust (the “Threshold Amount”). Once the VEBA Trust receives the Threshold Amount, any additional proceeds payable to the VEBA Trust for its membership interests in the Company and any membership interests retained by the VEBA Trust are to be transferred to Fiat for no further consideration. Fiat may also terminate the equity recapture agreement and acquire the membership interests retained by the VEBA Trust by paying an amount equal to the then-current specified Threshold Amount.


Number 2, the one listed in the 10K, would be much more beneficial for Fiat since they could acquire equity interest in Chrysler at low prices based on Fiat's current multiple. Also, they could agree 40% of Chrysler for a present value of 5.5BUSD.  Fiat's 2011 AR on the bottom of page 219 and the top of page 220 repeats what's said on Number 2. http://www.fiatspa.com/en-US/investor_relations/financial_reports/FiatDocuments/Bilanci/2011/Fiat_AnnualReport_2011_ENG.pdf (http://www.fiatspa.com/en-US/investor_relations/financial_reports/FiatDocuments/Bilanci/2011/Fiat_AnnualReport_2011_ENG.pdf)

Number 1, seems like the original contract but I have no idea. Maybe that's why VEBA thinks they can negotiate the price? Number 2, the 10K, makes the calculation very clear.

Considering Fiat's offering 139.7M for 3.3% (giving Chrysler a 4.2B value), and the union is asking for 343M (giving Chrysler a 10.3B value), this is the 2.5 billion dollar question. (0.415*(10.3-4.2))

Does anyone know the correct contractual terms for the valuation of Fiat's call options?
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on February 08, 2013, 04:14:11 AM
Newest Press Release:

http://www.fiatspa.com/it-IT/investor_relations/investors/presentazioni/FiatDocuments/2013/Investor_Meetings_in_US_Feb_7_8.pdf


BTW: Anyone who can update me with the pension status? I am not yet competent enough to properly value this...
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on February 10, 2013, 09:21:29 AM
What equity value agreement is right? (1) The Call Option Agreement that calls for Investment banks to come up with a valuation if the parties don't agree or (2) the one mentioned in Chrysler's 10k?

(1) Call Option Agreement Regarding Equity Securities of Chrysler Group LLC
. Annex C. Determination of Company Equity Value. Page C-1.
http://www.sec.gov/Archives/edgar/data/1513153/000119312511078025/dex992.htm  (http://www.sec.gov/Archives/edgar/data/1513153/000119312511078025/dex992.htm)

Quote
The Company Equity Value used to determine the Pre-IPO Call Option Exercise Price will be determined through the following process:
 
    (i)   For a period of ten Business Days from the date of delivery of the Notice of Exercise (the “Discussion Period”), Fiat and US Treasury shall negotiate exclusively with one another, in good faith, in order to agree on the Company Equity Value.
 
    (ii)   In the event that the parties do not agree on the Company Equity Value pursuant to clause (i) above, within two Business Days of the end of the Discussion Period, Fiat, first, and US Treasury, second, shall each appoint (the date of the first such appointment being the “Appointment Date”) an internationally recognized investment banking firm (an “Appointed Bank”) and the Appointed Banks shall mutually appoint an additional internationally recognized investment banking firm (the “Independent Bank”, and, together with the Appointed Banks, the “Investment Banks”).
 
    (iii)   Each Investment Bank shall separately determine its best estimate of the Company Equity Value, based on the customary methodologies that such Investment Bank in its professional experience deem relevant to such a determination, and governed by the principle that the Company Equity Value determined by each such Investment Bank must be, in such firm’s opinion, fair, from a financial point of view, to each of Fiat and the US Treasury in the context of the general economic and industrial conditions prevailing at the time of such determination.
 
    (iv)   Each such Investment Bank shall conduct customary due diligence and the parties shall each cooperate with the Investment Banks in making information available to assist in this due diligence.
 
    (v)   Each Appointed Bank shall present its final determination of Company Equity Value to the parties no later than 20 Business Days after the Appointment Date, by simultaneously presenting to Fiat and US Treasury its determination of Company Equity Value.
 
    (vi)   In the event the Company Equity Values determined by the two Appointed Banks are within 10% of one another (determined by reference to the higher of the two), the Company Equity Value shall be the average of those two estimates and such determination of Company Equity Value shall be final and binding on the parties.
 
    (vii)   In the event the Company Equity Values determined by the two Appointed Banks are not within 10% of one another (determined by reference to the higher of the two), the Independent Bank shall present its valuation. The Company Equity Value shall then be determined by the Independent Bank, calculated as an amount equal to the average of the Company Equity Values determined by those two Investment Banks the estimates of which are numerically closest to one another, and such resulting determination shall be final and binding on the parties.

(2) Chrysler 2011 10K, pg 264
http://www.sec.gov/Archives/edgar/data/1513153/000119312512099069/d292973d10k.htm (http://www.sec.gov/Archives/edgar/data/1513153/000119312512099069/d292973d10k.htm)

Quote
VEBA Trust Call Option. The VEBA Trust has granted Fiat a call option on a portion of the Class A Membership Interests held by the VEBA Trust. The price of the membership interests acquired in connection with the exercise of the call option will depend on whether or not we have completed a Chrysler Group IPO at the time the option is exercised. If a Chrysler Group IPO has not occurred, the exercise price for this option is determined using a defined market-based multiple, not to exceed Fiat’s multiple, applied to our reported net income (loss) before interest expense, income tax expense, depreciation and amortization or property, plant and equipment and intangible assets, or EBITDA, for the most recent four quarters less our net industrial debt. If exercised contemporaneously with a Chrysler Group IPO, the exercise price for this option will be equal to the initial public offering price. Subsequent to a Chrysler Group IPO, the exercise price is determined by reference to a volume-weighted average price per share of our common stock. The call option is exercisable from July 1, 2012 to June 30, 2016, provided that it covers 40 percent of the membership interests currently held by the VEBA Trust, less any membership interests previously transferred under the equity recapture agreement described below, and may be exercised for no more than 8 percent of such membership interests in any six month period.

Equity Recapture Agreement. On July 21, 2011, Fiat acquired the U.S. Treasury’s rights under the equity recapture agreement between the U.S. Treasury and the VEBA Trust for $75 million, of which $15 million was paid to the Canadian Government pursuant to a separate arrangement between the U.S. Treasury and the Canadian Government. The equity recapture agreement provides rights to the economic benefit associated with the membership interests held by the VEBA Trust in excess of a threshold amount of $4.25 billion plus 9 percent per annum from January 1, 2010, less any proceeds, including certain distributions, previously received by the VEBA Trust (the “Threshold Amount”). Once the VEBA Trust receives the Threshold Amount, any additional proceeds payable to the VEBA Trust for its membership interests in the Company and any membership interests retained by the VEBA Trust are to be transferred to Fiat for no further consideration. Fiat may also terminate the equity recapture agreement and acquire the membership interests retained by the VEBA Trust by paying an amount equal to the then-current specified Threshold Amount.


Number 2, the one listed in the 10K, would be much more beneficial for Fiat since they could acquire equity interest in Chrysler at low prices based on Fiat's current multiple. Also, they could agree 40% of Chrysler for a present value of 5.5BUSD.  Fiat's 2011 AR on the bottom of page 219 and the top of page 220 repeats what's said on Number 2. http://www.fiatspa.com/en-US/investor_relations/financial_reports/FiatDocuments/Bilanci/2011/Fiat_AnnualReport_2011_ENG.pdf (http://www.fiatspa.com/en-US/investor_relations/financial_reports/FiatDocuments/Bilanci/2011/Fiat_AnnualReport_2011_ENG.pdf)

Number 1, seems like the original contract but I have no idea. Maybe that's why VEBA thinks they can negotiate the price? Number 2, the 10K, makes the calculation very clear.

Considering Fiat's offering 139.7M for 3.3% (giving Chrysler a 4.2B value), and the union is asking for 343M (giving Chrysler a 10.3B value), this is the 2.5 billion dollar question. (0.415*(10.3-4.2))

Does anyone know the correct contractual terms for the valuation of Fiat's call options?


Thanks a lot!
"no more than 8 percent of such membership interests in any six month period." So 8% * 40% = 3.2%. That is no wonder why Fiat is buying 3.3% per 6 months. If this goes too expensive, then they would simply go with  the 4.25 BN + 9% per year way. So there should not be too much uncertainty regarding whether Fiat will successfully acquire Chrysler then.
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on February 10, 2013, 09:33:59 AM
Chicago. Dart. Santander. New Ram. LCVs.

http://video.foxbusiness.com/v/2149009964001/dodge-ceo-on-new-car-financing/?intcmp=obnetwork
http://video.foxbusiness.com/v/2149395147001/chrysler-ramps-up-competition-with-us-autos/
http://video.foxbusiness.com/v/2149592514001/ram-truck-ceo-housing-market-truck-market-follow-same-trendline/
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on February 10, 2013, 12:06:13 PM
Quote
Fiat wants to grow its sales of Maserati nearly 10-fold to 50,000 in the next three years, with 300,000 for Alfa Romeo. It planned to invest €7.5bn in 2012, €7.5bn to €8.5bn this year and €8.5 to €9.5bn in 2014 as it focuses on the shift into premium.

Can anyone confirm these forecasts? I found "Capex (€bn)  2012: 7.5 2013e: 7.5-8.5  and 2014e: 8.5-9.5" in their most recent presentations..

Any assessment on FCF state in coming years? Practically limited positive to (most likely) negative?
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on February 10, 2013, 05:18:37 PM
Chrysler Says Santander Unit to Speed Financing Approvals.
http://www.bloomberg.com/news/2013-02-10/chrysler-says-santander-unit-to-speed-financing-approvals.html

* Chrysler Capital, the service that Santander Consumer USA Inc. will create to finance car and light-truck purchases and leases, may set up a full online approval process for customers to use before they visit a dealership, Peter Grady, Chrysler Group’s vice president of dealer network development and fleet operations, said in an interview.

* Chrysler selected Santander in part because of its expertise with so-called automated decisioning, which uses data modeling to speed the assessment of loan applications and set appropriate terms for the borrower, Grady said. “Santander Consumer USA does that today, in the subprime space,” Grady said. “There are certain things that they know that make them take a little bit more risk and approve more deals because they mine the data.”

* Chrysler decided against purchasing a stake in its venture with Santander because the automaker’s credit rating would have increased Chrysler Capital’s borrowing costs, Grady said.

* Santander will shoulder the risk of losses on loans covered by the agreement and the two parties will share in any residual gains or losses from consumer leases, according to Chrysler’s filing.
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on February 11, 2013, 01:08:57 AM
By Francesca Cinelli
     Feb. 11 (Bloomberg) -- Balance sheet still key issue,
Citigroup says.
• With EU1b Chrysler R&D capitalization and EU3b higher capex than depreciation, says FCF undershoots net income by EU4b p.a. without working capital changes
• Says net income has to double just to get to FCF breakeven
• Without this, says net debt continues to rise (as Citi expects)
• Kept at sell with PT EU
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on February 11, 2013, 08:44:09 AM
By Francesca Cinelli
     Feb. 11 (Bloomberg) -- Balance sheet still key issue,
Citigroup says.
• With EU1b Chrysler R&D capitalization and EU3b higher capex than depreciation, says FCF undershoots net income by EU4b p.a. without working capital changes
• Says net income has to double just to get to FCF breakeven
• Without this, says net debt continues to rise (as Citi expects)
• Kept at sell with PT EU

That is not surprising to me. Fiat is making the big bet just like what Ford did in 2008. You can't count on FCF positive while making significant investments, but Wall Street clearly does not like to see this. WS always want to see stable FCF with steady quarterly increase.
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on February 11, 2013, 08:50:55 AM
Agree.

I have some very conservative estimates and arrive at a small positive FCF in 2015.

Not even accounting for Alfa Romeo's (well, I am accounting for the capex, not the possibile inflows) and targeting Maserati units at 15k (well below the 50k).

Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on February 12, 2013, 09:33:14 AM
Fiat Said to Discuss Financing Ahead of Chrysler Purchase.
http://www.bloomberg.com/news/2013-02-12/fiat-said-to-discuss-financing-ahead-of-chrysler-purchase.html

Banks are pitching Fiat on raising capital to strengthen its balance sheet, keep debt under control and sustain cash as it buys the rest of Chrysler, two of the people said. Fiat may need to boost capital by 1.5 billion euros, one of the people said. The Italian carmaker doesn’t plan to sell a stake in Ferrari to finance the deal, one person said.


Marchionne said Feb. 3 that a share sale would make sense only for “strategic moves” as the Agnelli family, which controls Fiat through Exor SpA, has already invested enough in the company. Fiat denied in December that it was planning to issue new shares to raise money to boost its Chrysler holding. Fiat also ruled out such a move last week, Warburton said in a Feb. 11 note, citing a New York meeting Fiat had with investors.


Fiat is also weighing whether to pay for part of the stake with its own shares, one of the people said.
Fiat, excluding Chrysler, had 9.1 billion euros of cash and 1.95 billion euros of undrawn credit lines at the end of 2012, with net debt from industrial activities of 5.05 billion euros. Chrysler had 8.8 billion euros of cash and 985 million euros of undrawn credit lines, with net debt of 1.5 billion euros at the end of last year, Fiat said Jan. 30. “Fiat has to sell assets or has to sell shares,” Harald Hendrikse, an analyst at Citigroup in London, wrote in a note to investors yesterday.


Southern European companies have been able to replace existing debt facilities in the past two months as credit conditions in the region improve. Fiat Industrial SpA, the truck and tractor maker spun off from car manufacturer Fiat in 2011, refinanced a two billion-euro credit line last week, and Enel SpA, Italy’s largest power company, yesterday extended 9.4 billion euros of loans two years before they were due.
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on February 12, 2013, 01:47:36 PM
Fiat Said to Discuss Financing Ahead of Chrysler Purchase.
http://www.bloomberg.com/news/2013-02-12/fiat-said-to-discuss-financing-ahead-of-chrysler-purchase.html

Banks are pitching Fiat on raising capital to strengthen its balance sheet, keep debt under control and sustain cash as it buys the rest of Chrysler, two of the people said. Fiat may need to boost capital by 1.5 billion euros, one of the people said. The Italian carmaker doesn’t plan to sell a stake in Ferrari to finance the deal, one person said.


Marchionne said Feb. 3 that a share sale would make sense only for “strategic moves” as the Agnelli family, which controls Fiat through Exor SpA, has already invested enough in the company. Fiat denied in December that it was planning to issue new shares to raise money to boost its Chrysler holding. Fiat also ruled out such a move last week, Warburton said in a Feb. 11 note, citing a New York meeting Fiat had with investors.


Fiat is also weighing whether to pay for part of the stake with its own shares, one of the people said.
Fiat, excluding Chrysler, had 9.1 billion euros of cash and 1.95 billion euros of undrawn credit lines at the end of 2012, with net debt from industrial activities of 5.05 billion euros. Chrysler had 8.8 billion euros of cash and 985 million euros of undrawn credit lines, with net debt of 1.5 billion euros at the end of last year, Fiat said Jan. 30. “Fiat has to sell assets or has to sell shares,” Harald Hendrikse, an analyst at Citigroup in London, wrote in a note to investors yesterday.


Southern European companies have been able to replace existing debt facilities in the past two months as credit conditions in the region improve. Fiat Industrial SpA, the truck and tractor maker spun off from car manufacturer Fiat in 2011, refinanced a two billion-euro credit line last week, and Enel SpA, Italy’s largest power company, yesterday extended 9.4 billion euros of loans two years before they were due.

the Agnelli family, which controls Fiat through Exor SpA, has already invested enough in the company.

This implies that Agnelli will probably not get a sweeten deal from Fiat and dilute the rest of us.
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on February 15, 2013, 08:49:35 AM
You can always count on Silvio.

Berlusconi defends need for bribery.
http://www.ft.com/intl/cms/s/0/be7b2b5c-76bb-11e2-ac91-00144feabdc0.html#axzz2Ki0sN4tD

Former prime minister Silvio Berlusconi has defended the need for bribery in winning contracts for Italy’s multinationals, as politicians campaigning in general elections have been forced to respond to a welter of corruption scandals revolving around the nexus of politics and business.

“Bribes are a phenomenon that exists and it’s useless to deny the existence of these necessary situations when you are negotiating with third world countries and regimes,” Mr Berlusconi, leader of a centre-right coalition and seeking his fourth stint in office, said on Thursday.

Mr Berlusconi defended Giuseppe Orsi, head of the state-controlled Finmeccanica defence group who was arrested on Tuesday and accused of involvement in bribes paid to Indian government officials to secure a helicopter contract. Mr Orsi, appointed chief executive under the last centre-right government in 2011 and replaced on Wednesday, has denied the accusations.

“These are not crimes,” said Mr Berlusconi, describing payments as “commissions”. He also defended state-controlled energy group Eni, whose chief executive Paolo Scaroni is under investigation for alleged bribes paid by its Saipem subsidiary to win contracts in Algeria. Mr Scaroni denies the allegations.

Title: Re: FIATY - Fiat S.p.A.
Post by: meiroy on February 20, 2013, 05:32:26 AM
http://www.freep.com/article/20130220/BUSINESS01/302200042/1210/NLETTER15/Chrysler-won-t-build-Maserati-SUV-in-Detroit-as-Jeep-sales-soar?source=nletter-AUTO-FREEP-autonews (http://www.freep.com/article/20130220/BUSINESS01/302200042/1210/NLETTER15/Chrysler-won-t-build-Maserati-SUV-in-Detroit-as-Jeep-sales-soar?source=nletter-AUTO-FREEP-autonews)

"Chrysler will not build a Maserati SUV called the Levante in Detroit, partly because the Jeep Grand Cherokee's robust sales are keeping workers at the Jefferson North assembly plant busy.

Fiat, which owns most of Chrysler and all of Maserati, wants to make the Levante at its Mirafiori plant in Turin in order to keep more Italian workers employed, according to a report in Automotive News.

"Due to the high demand for the Grand Cherokee, we reallocated the product to Italy," Maserati CEO Harald Wester said last month at the North American International Auto Show in Detroit.

Chrysler added about 1,000 workers at Jefferson North in October to make more Grand Cherokees and Dodge Durangos. In 2012, Grand Cherokee's global sales rose 26% to 223,000..."
Title: Re: FIATY - Fiat S.p.A.
Post by: txlaw on February 20, 2013, 05:55:52 AM
http://www.freep.com/article/20130220/BUSINESS01/302200042/1210/NLETTER15/Chrysler-won-t-build-Maserati-SUV-in-Detroit-as-Jeep-sales-soar?source=nletter-AUTO-FREEP-autonews (http://www.freep.com/article/20130220/BUSINESS01/302200042/1210/NLETTER15/Chrysler-won-t-build-Maserati-SUV-in-Detroit-as-Jeep-sales-soar?source=nletter-AUTO-FREEP-autonews)

"Chrysler will not build a Maserati SUV called the Levante in Detroit, partly because the Jeep Grand Cherokee's robust sales are keeping workers at the Jefferson North assembly plant busy.

Fiat, which owns most of Chrysler and all of Maserati, wants to make the Levante at its Mirafiori plant in Turin in order to keep more Italian workers employed, according to a report in Automotive News.

"Due to the high demand for the Grand Cherokee, we reallocated the product to Italy," Maserati CEO Harald Wester said last month at the North American International Auto Show in Detroit.

Chrysler added about 1,000 workers at Jefferson North in October to make more Grand Cherokees and Dodge Durangos. In 2012, Grand Cherokee's global sales rose 26% to 223,000..."

Nice to hear.
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on February 20, 2013, 07:02:21 AM
What does this mean in terms of progress of platform conversion? Are the italian plants ready to start manufacturing the SUV? Or do they still need to adapt the factories?
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on February 21, 2013, 09:28:29 AM
Fiat-Chrysler increased global sales by 12.7% in January
http://www.autonews.com/article/20130221/ANE/130229980#ixzz2LYVmwbRz
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on February 25, 2013, 09:02:16 PM
Fiat-Chrysler increased global sales by 12.7% in January
http://www.autonews.com/article/20130221/ANE/130229980#ixzz2LYVmwbRz


Plan, you have tracked Fiat for quite a while. May I ask you a question?
There seems to be a large margin of safety. What has to happen for this investment to die? :)
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on February 25, 2013, 11:27:54 PM
Just my two cents (not nearly as experienced as PlanMaestro):

- US market flattens out, Chrysler loses momentum
- Latam market crashes
- Maserati's and/or Alfa's do not sell as projected
- EMEA market recovery takes much longer than projected
- Hassle over the option agreement to buy requiring stake

I think the third point is the most problematic one, but I am still fairly bullish and thus slightly biased so happy to hear all of your thoughts :)
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on February 26, 2013, 04:38:15 AM
Quote
Fitch playing catch up on Peugeot and Fiat; opportunity to reflect on Fiat valuations

Yesterday afternoon Fitch moved negatively on Fiat and Peugeot. Peugeot’s senior unsecured debt rating has been affirmed at BB- with a negative outlook while the issuer default rating was taken down a notch to B+. Meanwhile Fiat was downgraded to BB- from BB with a negative outlook for both the senior unsecured rating and the issuer default rating. Fitch’s notching of Peugeot’s senior unsecured rating versus the issuer default rating reflects the agency’s believe that senior unsecured bonds would recover a relative high 50-70% in the event of an issuer default.

Fitch in our view tends to be act belatedly on the autos and given that the company does not rate Banque PSA and RCI Banque the agency’s relevance in High Yield autos is questionable. In any event the reasons for the moves serve to remind us of the fundamental issue that investors need to weigh in particular with regards to Peugeot. Essentially the agencies (all of them) have poured scorn on Peugeot’s promise to be cash flow neutral by the end of 2014. They also expect significant cash burn at Fiat for at least the next 2 years. Investors, then, need to decide if they believe the company guidance or the agencies. We tend to side with the agencies, primarily because insider expectations for the all important European theatre are too optimistic in our view.

Clearly none of this affects our current view in HY Autos; we are constructive on short-dated auto paper with a particular affection for the PEUGOT 8.375% 2014. We are cautious on longer dated Renault and Peugeot paper which we think will remain sensitive to potentially poor earnings in Europe.

We are neutral long dated Fiat paper (16s through 18s) which tend to trade flat to slightly wide of Peugeot’s industrial bonds. Fiat investors clearly need to weigh whether the company will succeed in merging with Chrysler and on what terms. In our view there is more downside in Fiat than there is upside. If they merge with Chrysler with no change in credit metrics (unlikely, credit metrics will diminish) then you are left with a High-B/Low-BB credit. But with Fiat trading 200bps wide of High-BB Renault in the long-end how much upside can there be in Fiat? Between 50 -100 bps in our view relative to Renault. On the other hand if Fiat is unable to consummate its marriage with Chrysler the downside is considerable (unless the company opts to sell assets like Chrysler or Ferrari). Anybody’s guess where a standalone Fiat would trade.

Given the uncertainty on how bad the situation would be if Fiat can’t merge with Chrysler on favourable terms (or whether Fiat would be willing to make drastic disposals), and given the potential for a substantial rally if Ma
way we are forced to remain neutral on long dated Fiat paper.

I am guessing they do not completely understand the option agreement with the 5.5 cap on Chrysler stake?
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on February 26, 2013, 07:35:08 AM
Quote
Fitch playing catch up on Peugeot and Fiat; opportunity to reflect on Fiat valuations

Yesterday afternoon Fitch moved negatively on Fiat and Peugeot. Peugeot’s senior unsecured debt rating has been affirmed at BB- with a negative outlook while the issuer default rating was taken down a notch to B+. Meanwhile Fiat was downgraded to BB- from BB with a negative outlook for both the senior unsecured rating and the issuer default rating. Fitch’s notching of Peugeot’s senior unsecured rating versus the issuer default rating reflects the agency’s believe that senior unsecured bonds would recover a relative high 50-70% in the event of an issuer default.

Fitch in our view tends to be act belatedly on the autos and given that the company does not rate Banque PSA and RCI Banque the agency’s relevance in High Yield autos is questionable. In any event the reasons for the moves serve to remind us of the fundamental issue that investors need to weigh in particular with regards to Peugeot. Essentially the agencies (all of them) have poured scorn on Peugeot’s promise to be cash flow neutral by the end of 2014. They also expect significant cash burn at Fiat for at least the next 2 years. Investors, then, need to decide if they believe the company guidance or the agencies. We tend to side with the agencies, primarily because insider expectations for the all important European theatre are too optimistic in our view.

Clearly none of this affects our current view in HY Autos; we are constructive on short-dated auto paper with a particular affection for the PEUGOT 8.375% 2014. We are cautious on longer dated Renault and Peugeot paper which we think will remain sensitive to potentially poor earnings in Europe.

We are neutral long dated Fiat paper (16s through 18s) which tend to trade flat to slightly wide of Peugeot’s industrial bonds. Fiat investors clearly need to weigh whether the company will succeed in merging with Chrysler and on what terms. In our view there is more downside in Fiat than there is upside. If they merge with Chrysler with no change in credit metrics (unlikely, credit metrics will diminish) then you are left with a High-B/Low-BB credit. But with Fiat trading 200bps wide of High-BB Renault in the long-end how much upside can there be in Fiat? Between 50 -100 bps in our view relative to Renault. On the other hand if Fiat is unable to consummate its marriage with Chrysler the downside is considerable (unless the company opts to sell assets like Chrysler or Ferrari). Anybody’s guess where a standalone Fiat would trade.

Given the uncertainty on how bad the situation would be if Fiat can’t merge with Chrysler on favourable terms (or whether Fiat would be willing to make drastic disposals), and given the potential for a substantial rally if Ma
way we are forced to remain neutral on long dated Fiat paper.

I am guessing they do not completely understand the option agreement with the 5.5 cap on Chrysler stake?

Or they think Fiat does not have money, or needs a big dilutive financing package to buy out Chrysler at $5.5 bn.
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on February 26, 2013, 07:43:58 AM
Company Press Release:

Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on February 26, 2013, 09:35:20 AM
May I ask you a question? There seems to be a large margin of safety. What has to happen for this investment to die? :)

Two big reasons in my opinion:

(1) Established perceptions do not change fast: Fiat was never much alive until the Chrysler comeback. Fiat Automotive was a marginal player one step from disappearence for decades. If the Uno had not worked, if the Punto had not worked, if the Panda had not worked, we would not be talking about Fiat.

(2) Italy: in these times being Italian is not much of an endorsement for a stock despite that an Italy leaving the Euro would be a boom for Fiat. But for the moment the Euro is putting them in the red in Europe and it can get worse.

Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on February 26, 2013, 10:46:17 PM
With limited exposure to Italy (8% of sales) and to Europe (20% of sales) the question is, how worse?
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on February 27, 2013, 07:53:56 AM
May I ask you a question? There seems to be a large margin of safety. What has to happen for this investment to die? :)

Two big reasons in my opinion:

(1) Established perceptions do not change fast: Fiat was never much alive until the Chrysler comeback. Fiat Automotive was a marginal player one step from disappearence for decades. If the Uno had not worked, if the Punto had not worked, if the Panda had not worked, we would not be talking about Fiat.

(2) Italy: in these times being Italian is not much of an endorsement for a stock despite that an Italy leaving the Euro would be a boom for Fiat. But for the moment the Euro is putting them in the red in Europe and it can get worse.

If Italy leaves Europe, Fiat will be more competitive cost-basis wide, right? Since it generates most of the profits outside of Italy, its revenue will not be impacted by the worthless Lira.
I still don't see how German will allow Italy to leave. It even tries to keep Greece in.

How about Alfa Romeo and and Maserati? If Fiat spends 3 bn cash of capex to upgrade the plants for these cars and they couldn't sell, then it will be a big problem for Fiat, no? Will there be enough cash to close down the plants by then?
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on February 28, 2013, 10:02:03 PM
http://www.gwinvestors.com/Main/Blog/Entries/2013/2/28_Fourth_Quarter_2012_Letter_files/2013.02.28%20Q4%202012%20Letter%20to%20Investors.pdf (http://www.gwinvestors.com/Main/Blog/Entries/2013/2/28_Fourth_Quarter_2012_Letter_files/2013.02.28%20Q4%202012%20Letter%20to%20Investors.pdf)

As you review the positions above, you will notice without surprise that our largest position is Fiat SpA (F IM), which one may think of as being a particularly risky investment, given Fiat is an Italian company and the country’s circus-like politics have made the United States government look utopian.

The “downside” scenario of Italy exiting the Eurozone and potentially bringing the EU into a depression would actually result in no projected losses for our investment. Because Fiat’s debt holders do not have a lien on any specific assets, the very profitable Brazilian operations could be sold to Chrysler, and Fiat’s (soon to be) 65% holding in Chrysler could be distributed to Fiat’s stockholders. Additionally, Fiat’s 90% ownership of Ferrari could be distributed to stockholders without bondholder approval. At recent Aston Martin sale prices, Ferrari is worth just over €4.50 per Fiat share and using Ford’s & GM’s valuation, Chrysler is faster-growing and worth between €4.50-8.00 per share, depending on the comparable metric used.

Also notable is that in this same scenario,the “safer” investment in Volkswagen could turn out to be quite a disaster, with production based in a country with a swiftly appreciating currency. Even Volkswagen’s profitable Chinese dominance couldn’t subsidize its European price war then.

Even though our underlying risk in Fiat is limited, the risk-adjusted return display in Table 2 assumes that the equity price of Fiat can go down precipitously, and stacks this possibility against our upside potential should a few relatively simple things happen over the next two years, such as the global expansion of Maserati, Alfa Romeo and Jeep, the achievement of modest cost synergies between Chrysler and Fiat, and the completion of the merger between the two companies.
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on February 28, 2013, 11:35:11 PM
Good information, also my line of thinking.
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on March 01, 2013, 08:07:44 AM
The sort of thing that "One Ford'" cannot do. I love how they are segmenting and differentiating their brands.

Imported from Motown.
http://www.nytimes.com/2013/03/01/business/a-shared-history-in-detroit-is-an-ad-inspiration.html
Title: Re: FIATY - Fiat S.p.A.
Post by: bathtime on March 01, 2013, 08:54:38 AM
Info on Italian trading tax:

Interactive Brokers would like to inform clients of the Italian Financial Transaction Tax (IFTT) which comes into force 1 March 2013. Key information regarding this new tax is provided below:

Tax Rate: The rate is currently set at 0.12% (12 basis points)

Tax Base: The tax is assessed on the purchase of certain Italian equities and ADRs. The tax is due on the net position delivered on settlement date, as such purchases and sales which settle at a common depository will be eligible to be netted for determination of the tax.

Effective Date: The IFTT is applicable to trades on applicable securities commencing on March 1, 2013

Transaction Types: The IFTT will be applied to both exchange trades and to the purchase of shares resulting from an options exercise or assignment, or futures contract delivery.

Derivatives: The Italian FTT will apply to derivative transactions effective July 1, 2013. IB will provide updated information regarding the rates as additional information becomes available.
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on March 01, 2013, 09:23:25 AM
Chrysler Group, the third-largest U.S. automaker, said its U.S. sales rose 4.1 percent to 139,015 in February,
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on March 05, 2013, 03:48:59 PM
Fiat SpA F.MI +5.88%grabbed the spotlight at the Geneva International Motor Show on Tuesday with new racy flagship models for its Ferrari and Alfa Romeo, two of the Italian auto maker's premium brands.

More significant was Chief Executive Sergio Marchionne's renewed commitment to buying the 41.5% stake in Chrysler Group LLC, Fiat's majority-owned U.S. unit, in the face of a demand for an initial public offering by its minority shareholder. Mr. Marchionne said he has no wish to take Chrysler through an IPO.

Mr. Marchionne insisted Fiat has the financial capability to pull off a full merger by buying the stake of a United Auto Workers union trust despite heavy losses in Fiat's European operations. In contrast, Chrysler's sales and profit have bounced back strongly in the U.S. since emerging from bankruptcy protection under Fiat's management.

"We need to have all the activities under one umbrella," Mr. Marchionne said during a news conference here. "Having two types of shareholders for the same business is a bit ridiculous."

Fiat's sister company, Fiat Industrial SpA, FI.MI +4.82%is in the process of buying the shares it doesn't already own in U.S.-based industrial-equipment unit CNH Global CNH +4.39%NV.

Mr. Marchionne said Fiat should get access to the necessary credit from banks to fund the multibillion-dollar acquisition cost and has about €9 billion of cash on its balance sheet. Fiat aims to pay down debt at Chrysler to help facilitate the merger, according to people close to the companies.

"I have renewed a number of friendships with bankers," Mr. Marchionne said.

Fiat expects its net industrial debt to widen to about €7 billion ($9.12 billion) at the end of this year, from €6.5 billion at the end of 2012 due to sustained losses in Europe. Sales of new cars in the region are headed toward their sixth consecutive year of decline as the prolonged European economic crisis has hit mass-market auto makers like Fiat hard. Registrations of new cars in Italy, Fiat's home market, fell 17% in February to their lowest level since the 1980s.

Debt-ratings firm Fitch Ratings downgraded Fiat's creditworthiness to BB- from BB last week. It warned a further downgrade is in the offing because of the "persistent weakness of Fiat's stand-alone results;" uncertainty about Fiat's plan to turn around its European business; and the prospect Fiat will shell out cash to buy shares in Chrysler.

The family-controlled auto maker skipped its dividend for 2012 to shore up its cash reserves in anticipation of buying out the trust's Chrysler shares.

The Turin, Italy-based auto maker holds options to buy Chrysler shares every six months from the trust with the total capped at 16.6%. Fiat has pledged to increase its Chrysler ownership until it gets to more than 70%; it now holds a 58.5% stake.

The trust, called the UAW Retiree Medical Benefits Trust, which was set up to pay medical costs of Chrysler's union retirees, has asked Chrysler to initiate proceedings for an IPO as part of a 2009 agreement that helped bring the Auburn Hills, Mich., car maker out of court protection.

The trust declined to comment on Tuesday.

Last July, Fiat sought to exercise its first call option to buy a 3.3% stake in Chrysler from the trust. The trust, according to a lawsuit filed by Fiat in September, refused to turn over the shares. Earlier this month, with the lawsuit still pending, Fiat asked to buy additional shares from the trust. The court is expected to rule on the suit in the next several months, Fiat said.

Fiat had offered $139.7 million last year to buy 3.3% of Chrysler from the trust and this month proposed paying $198 million for another 3.3% stake. The trust responded to Fiat's suit over the initial 3.3% stake by asking for about $343 million.

Chrysler's U.S. profits—it has a set a net profit target of $2.2 billion and expects revenue of between $72 billion and $75 billion this year—are helping to offset Fiat's losses in Europe.

In the U.S., Chrysler's vehicle sales climbed 21% last year to 1.65 million, while its market share rose to 11.4% from 10.7%, making it the only major U.S. auto maker to gain share in 2012.

Fiat's problems have gotten so serious in Europe that, with many of its factories working well below full capacity, Mr. Marchionne last year tore up one restructuring plan to focus on another.

The auto maker is streamlining its lineup to focus on premium brands, principally the Fiat 500 range of city cars, Alfa Romeo and Maserati, aimed at export markets rather than Europe. Fiat is counting on the new Alfa Romeo 4C roadster to spearhead the brand's return to the U.S. later this year.



http://online.wsj.com/article/SB10001424127887324178904578342311170472032.html?mod=WSJ_business_whatsNews (http://online.wsj.com/article/SB10001424127887324178904578342311170472032.html?mod=WSJ_business_whatsNews)


Fiat's Marchionne Pursues Full Ownership of Chrysler .
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on March 07, 2013, 06:08:28 AM

Former Italian Premier Silvio Berlusconi convicted in illegal publication of wiretaps (And all the other charges.)

http://www.brandonsun.com/world/breaking-news/former-italian-premier-silvio-berlusconi-convicted-in-illegal-publication-of-wiretaps-195836721.html?thx=y
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on March 07, 2013, 09:08:51 AM
http://www.ft.com/cms/s/0/06ab83e8-6c7d-11e2-b774-00144feab49a.html#ixzz2MsHucOWv

Ms Krebs said Chrysler, which is controlled by Italy’s Fiat, had suffered from a 70 per cent decline in sales of the Jeep Liberty, which dragged down Jeep sales 4 per cent year on year. Jeep has been key to Chrysler’s recovery from its bankruptcy in 2009. Ms Krebs said the replacement for the Liberty, due to be unveiled in March at the New York Auto Show, could not hit the market soon enough.

“The wind-down of the old Liberty hurt Jeep sales, which have led Chrysler’s revival,” she said. “The freshened Compass saw a sales surge that bodes well for a revamped Liberty.”

Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on March 07, 2013, 01:24:28 PM
I think he stated in an earlier interview (some months ago) that Jeep sales would be disappointing in Q1.
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on March 08, 2013, 07:18:31 AM

(http://farm9.staticflickr.com/8510/8539803884_31f216f6e0.jpg)[/url]
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on March 08, 2013, 07:33:25 AM
Marchionne's big gamble.
http://europe.autonews.com/apps/pbcs.dll/article?AID=/20130307/ANE/130309970/marchionnes-big-gamble#axzz2Mxf3Syvc

All the analyst points:


Analysts are skeptical about Marchionne's new plan because it will likely conflict with his other mission, which is to take full control of Chrysler Group. Industry watchers say Fiat simply does not have enough cash to buy the stake it still needs to take over Chrysler and also to invest billions to revive Alfa Romeo and Maserati.

"While Fiat adapting its product to a polarizing market makes sense, we think the market could be disappointed that capacity actions do not feature in Fiat's plans, especially given Ford, GM and PSA have all made tough capacity decisions recently," Morgan Stanley analysts wrote in a note to investors. In early February, Marchionne reiterated that Fiat won't close any Italian vehicle assembly factories. The Cassino, Melfi, Mirafiori (Turin) and Pomigliano plants have an installed capacity of 1 million units, but last year their combined output declined by 18 percent to 394,620 units, according to the Italian automakers association ANFIA.

Analysts believe Marchionne's mission might be too costly to achieve. "Fiat's plan to move upmarket comes with a big price tag. With up to 18 billion in capital expenditures to fund over two years, net debt is unlikely to decline before 2015, meaning a full buyout for Chrysler may be off the table for some time," Morgan Stanley said.

Barclays Capital also signaled concern in a recent analyst note. The firm wonders how Fiat can succeed when most of its rivals "are pursuing the opposite strategy of trying to localize production to hedge against currency risk." The analysts also said: "Competitors have tried on numerous occasions but failed to push upscale, with the notable exception of Audi."

Another skeptic is Max Warburton of Bernstein Research. He wrote: "Perhaps it is possible to grow Maserati, Alfa, the [Fiat] 500 [range] and Jeep, but it will take time, capital and success is obviously far from assured." Warburton noted that Marchionne's strategy results from pressure from the Italian government to pursue growth when the pragmatic choice would be to rationalize.

Massimo Vecchio, a financial analyst with Mediobanca Securities in Milan, said the new Alfa plan will not succeed because the competition is too tough. "Even if it reaches the planned 300,000 units, Alfa will continue to lose money and remain a pygmy in the battle of titans between the German premium brands, which are already selling well over a 1 million units a year," Vecchio said.

Mediobanca's Vecchio agrees: "In the years to come, Maserati looks to become a success story. This relaunch was long overdue."
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on March 08, 2013, 08:13:18 AM
Marchionne's big gamble.
http://europe.autonews.com/apps/pbcs.dll/article?AID=/20130307/ANE/130309970/marchionnes-big-gamble#axzz2Mxf3Syvc

All the analyst points:


Analysts are skeptical about Marchionne's new plan because it will likely conflict with his other mission, which is to take full control of Chrysler Group. Industry watchers say Fiat simply does not have enough cash to buy the stake it still needs to take over Chrysler and also to invest billions to revive Alfa Romeo and Maserati.

"While Fiat adapting its product to a polarizing market makes sense, we think the market could be disappointed that capacity actions do not feature in Fiat's plans, especially given Ford, GM and PSA have all made tough capacity decisions recently," Morgan Stanley analysts wrote in a note to investors. In early February, Marchionne reiterated that Fiat won't close any Italian vehicle assembly factories. The Cassino, Melfi, Mirafiori (Turin) and Pomigliano plants have an installed capacity of 1 million units, but last year their combined output declined by 18 percent to 394,620 units, according to the Italian automakers association ANFIA.

Analysts believe Marchionne's mission might be too costly to achieve. "Fiat's plan to move upmarket comes with a big price tag. With up to 18 billion in capital expenditures to fund over two years, net debt is unlikely to decline before 2015, meaning a full buyout for Chrysler may be off the table for some time," Morgan Stanley said.

Barclays Capital also signaled concern in a recent analyst note. The firm wonders how Fiat can succeed when most of its rivals "are pursuing the opposite strategy of trying to localize production to hedge against currency risk." The analysts also said: "Competitors have tried on numerous occasions but failed to push upscale, with the notable exception of Audi."

Another skeptic is Max Warburton of Bernstein Research. He wrote: "Perhaps it is possible to grow Maserati, Alfa, the [Fiat] 500 [range] and Jeep, but it will take time, capital and success is obviously far from assured." Warburton noted that Marchionne's strategy results from pressure from the Italian government to pursue growth when the pragmatic choice would be to rationalize.

Massimo Vecchio, a financial analyst with Mediobanca Securities in Milan, said the new Alfa plan will not succeed because the competition is too tough. "Even if it reaches the planned 300,000 units, Alfa will continue to lose money and remain a pygmy in the battle of titans between the German premium brands, which are already selling well over a 1 million units a year," Vecchio said.

Mediobanca's Vecchio agrees: "In the years to come, Maserati looks to become a success story. This relaunch was long overdue."


This is what I wonder too. Does Fiat really have that much cash to do both at the same time?
He seems pretty confident so far, and he said he has some bank friends. If he can get a $5bn loan from the bank for funding the merger, then there is no question what will happen.
Do you know if the debt market closes the door to Italy government bonds, can companies headquartered in Italy have debt access?
Do you know similar examples in Greece?

Chrysler is getting stronger everyday. Maybe in the end it is Chrysler taking the $5bn loan to do the reverse merger with Fiat. Is that possible?
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on March 08, 2013, 08:25:34 AM
http://www.gwinvestors.com/Main/Blog/Entries/2013/2/28_Fourth_Quarter_2012_Letter_files/2013.02.28%20Q4%202012%20Letter%20to%20Investors.pdf

Green Wood investor's latest letter. It says that Fiat's debt has no liens, which means in the worst case scenario, it can sell Ferrari or Chrysler and distribute the cash to shareholders, without bond holder approval, and the two adds up to be worth more than 9 euro per share. I think this is very good as it will be easier for Fiat to get a senior secured loan to fund the merger. What do you think?
Title: Re: FIATY - Fiat S.p.A.
Post by: dolce2think on March 08, 2013, 09:35:57 PM
It would be difficult to distribute the assets to the shareholders in the mentioned way, as the bondholders are then left with the european operations and the parts business. Anyways, if Italy were to exit the euo - which looks unlikely - then Fiat could still serve the debt, as it exports most of its cars and as the italian factories would be competitive again. Only its european finance arm could be under stress, since the south europeans would pay in Lira and the debt would be in euros. As they have only 50% in the JV, this would be around 0,7 Euro per share at risk, at most.

I think, that the break-even numbers on the factories are a bit misleading, since this probably refers to the mass market brands with operating margins
of 5% and sales prices around 20000 Euros. The Maserati plan is for 50.000 cars and 20% EBITDA margin, so this alone could bring in enough to cover
the deficit, as it would take 0,5 mio mass market cars to produces the same result. The Maserati success is quite possible, as for example Porsche has
problems in the early nineties and hires Wendelin Wiedeking to fix it, they went from 20K cars to 50K cars pretty quickly. The Cayenne sold 75K units last
year, and the Panamera 30K - and both models ramped very quickly. So for Maserati - I think 50K is possible.
Alfa is a bit more vexing, since they tried several times. Actually 10 years ago, the already sold more than 200K cars, with the 156, 147,...
In Germany, many buyers opted for it, but later they simply could not keep pace with BMW. Still, its possible to achieve this, since they have the chrysler
distribution in USA.

Valuation wise, is very attractive as Fiat is basically an option on 1) Chrysler revaluation (along with GM and Ford) and 2) Maserati, Alfa, Jeep, strategy.
Even if only Chrysler were valued more normally, this could bring a 2x or 3x on the Fiat shares. Best case, they buy out the rest with a loan, worst would
be an premature IPO for Chrysler, with the VEBA stake covering less than the treshold amount. If they IPO at higher prices down the road, it is even
likely that Fiat gets another 10-15% for free, as the threshold is covered by the rest. Chryslers valuation is volatile as it is levered via its pension debt,
vs GM which has a cash hoard to offset it. Of course, the leverage works both ways, but the payoff is heavily skewed to the upside.

Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on March 10, 2013, 09:03:15 AM
It would be difficult to distribute the assets to the shareholders in the mentioned way, as the bondholders are then left with the european operations and the parts business. Anyways, if Italy were to exit the euo - which looks unlikely - then Fiat could still serve the debt, as it exports most of its cars and as the italian factories would be competitive again. Only its european finance arm could be under stress, since the south europeans would pay in Lira and the debt would be in euros. As they have only 50% in the JV, this would be around 0,7 Euro per share at risk, at most.

I think, that the break-even numbers on the factories are a bit misleading, since this probably refers to the mass market brands with operating margins
of 5% and sales prices around 20000 Euros. The Maserati plan is for 50.000 cars and 20% EBITDA margin, so this alone could bring in enough to cover
the deficit, as it would take 0,5 mio mass market cars to produces the same result. The Maserati success is quite possible, as for example Porsche has
problems in the early nineties and hires Wendelin Wiedeking to fix it, they went from 20K cars to 50K cars pretty quickly. The Cayenne sold 75K units last
year, and the Panamera 30K - and both models ramped very quickly. So for Maserati - I think 50K is possible.
Alfa is a bit more vexing, since they tried several times. Actually 10 years ago, the already sold more than 200K cars, with the 156, 147,...
In Germany, many buyers opted for it, but later they simply could not keep pace with BMW. Still, its possible to achieve this, since they have the chrysler
distribution in USA.

Valuation wise, is very attractive as Fiat is basically an option on 1) Chrysler revaluation (along with GM and Ford) and 2) Maserati, Alfa, Jeep, strategy.
Even if only Chrysler were valued more normally, this could bring a 2x or 3x on the Fiat shares. Best case, they buy out the rest with a loan, worst would
be an premature IPO for Chrysler, with the VEBA stake covering less than the treshold amount. If they IPO at higher prices down the road, it is even
likely that Fiat gets another 10-15% for free, as the threshold is covered by the rest. Chryslers valuation is volatile as it is levered via its pension debt,
vs GM which has a cash hoard to offset it. Of course, the leverage works both ways, but the payoff is heavily skewed to the upside.

Thanks a lot. I think your analysis makes a lot of sense.
Right now Fiat cannot access Chrysler's cash flow unless it acquires 80% of the stakes, under their agreement with VEBA.
What happens if the IPO happens? I think if the IPO happens, then this restriction should be removed, right? At that time, Chrysler can declare a dividend, which means Fiat can access their cash flow. The only problem with that is the double taxation, I think. Will Fiat have to pay for the tax on the dividends in this case?
Title: Re: FIATY - Fiat S.p.A.
Post by: dolce2think on March 10, 2013, 08:26:38 PM
No, the dividends would be tax exempt (95% exempt) on the Italian side, the way I read it.

https://www.deloitte.com/assets/Dcom-Global/Local%20Assets/Documents/Tax/Taxation%20and%20Investment%20Guides/2012/dttl_tax_highlight_2012_Italy.pdf

Further, Fiat already accesses the cashflow, since they plan their capex together and chrysler does more than half.
Also, it has been indicated, that chrysler could loan money to Fiat, which "might" need VEBA approval. There are many
ways in which they can come around this, at the end of the day, VEBA would like to reach the treshold payment amount.
If Fiat buys the rest of the stake for say 4 bio USD, then the combined entity would be levered around 1xEBITDA (2013,
ex pension leverage). This is maybe doable, but in todays auto-environment it is considered risky - especially since
the spend all of the CF on Capex for 2013/14.

The European car market is viewed very negatively at the moment - maybe too negative. The "hard facts" are:
weak demographics, fleet age much younger than US (8.5 vs 11y) and of course the austerity. So the consensus
is "no recovery till the end of the decade". Especially hit is Peugeot - which sells most of its cars in Southern Europe.
During the credit bubble 2004-2007 they bought all new cars there and will keep them till better times come.
On the other hand, the car companies are very cheap and beaten down and will downsize to the environment.
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on March 11, 2013, 08:45:08 AM
No, the dividends would be tax exempt (95% exempt) on the Italian side, the way I read it.

https://www.deloitte.com/assets/Dcom-Global/Local%20Assets/Documents/Tax/Taxation%20and%20Investment%20Guides/2012/dttl_tax_highlight_2012_Italy.pdf

Further, Fiat already accesses the cashflow, since they plan their capex together and chrysler does more than half.
Also, it has been indicated, that chrysler could loan money to Fiat, which "might" need VEBA approval. There are many
ways in which they can come around this, at the end of the day, VEBA would like to reach the treshold payment amount.
If Fiat buys the rest of the stake for say 4 bio USD, then the combined entity would be levered around 1xEBITDA (2013,
ex pension leverage). This is maybe doable, but in todays auto-environment it is considered risky - especially since
the spend all of the CF on Capex for 2013/14.

The European car market is viewed very negatively at the moment - maybe too negative. The "hard facts" are:
weak demographics, fleet age much younger than US (8.5 vs 11y) and of course the austerity. So the consensus
is "no recovery till the end of the decade". Especially hit is Peugeot - which sells most of its cars in Southern Europe.
During the credit bubble 2004-2007 they bought all new cars there and will keep them till better times come.
On the other hand, the car companies are very cheap and beaten down and will downsize to the environment.


Fiat already accesses the cashflow? Where did you get that info? Just because they plan capex together doesn't mean Fiat has access to Chrysler's cashflow.

If Chrysler can lend a loan to Fiat, then I don't see how they couldn't merge.
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on March 11, 2013, 08:54:18 AM
Quote
N.B.: All Chrysler Group activities are included under Industrial Activities and Chrysler Group’s treasury activities
(including funding and cash management) are managed separately from the rest of Fiat Group.

From the 2012 report.
Title: Re: FIATY - Fiat S.p.A.
Post by: dolce2think on March 12, 2013, 02:38:29 AM
I should have been more explicit - of course, Fiat entity cannot "soak" the cash of chrysler entity, albeight I heard Marchionne saying, that
in theory chrysler could lend to fiat.
But - looking at it the other way - Fiat and Marchionne do have effective control over Chryslers actions, its capital spending...
and that spending is beeing allocated in a way that benefits Fiat (as well as Chrysler). If they were totally separate entities, would they build
Jeeps in Italy, Maseratis in USA? Maybe, but beeing under one control, they act differently, and of course are Fiats empty factories driving decisions.

It will be interesting to see how this plays out and what rabbits Marchionne can pull out of his hat.
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on March 12, 2013, 01:05:25 PM
Quote
Fiat SpA (F) is raising 1.25 billion euros ($1.6 billion) from its first sale of bonds in the currency since July, helping spur the busiest start to a year for euro debt issuance from carmakers since 2009.
Fiat is selling high-yield notes due in five years at 6.625 percent, according to a person familiar with the matter. The deal lifts sales from carmakers to 11.5 billion euros this year, compared with 10.7 billion euros during the same period in 2012, according to data compiled by Bloomberg.
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on March 14, 2013, 09:35:40 PM
http://www.businessweek.com/articles/2013-03-14/the-italian-legend-steering-car-design-for-fiat-chrysler#r=rss (http://www.businessweek.com/articles/2013-03-14/the-italian-legend-steering-car-design-for-fiat-chrysler#r=rss)

The Italian Legend Steering Car Design for Fiat-Chrysler
Title: Re: FIATY - Fiat S.p.A.
Post by: brker_guy on March 19, 2013, 05:34:34 PM
http://www.autonews.com/article/20130319/OEM/303199842/fiat-says-profit-to-fall-as-jeep-launch-compounds-europe-woes&cciid=email-autonews-daily#axzz2O2FgdFEF

Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on March 20, 2013, 05:37:36 AM
I was mistaken. Exor has not announced anything about converting preferred and saving shares into ordinary. What I read was a passage in a report from Cheuvreux:
"In our view, the simplification of the holding structure would be the best
way for Exor to shrink the holding discount. The planned cancellation of
FIAT/FIAT Industrial non-voting shares could be the first step in this
direction. We believe a similar deal for Exor would have a beneficial
impact on the cost of capital, reducing dividend commitments."

However, if a mandatory conversion were to happen, it will most likely not be on a 1:1 basis. In the case of Fiat Industrial the conversion was as stated:
"...at the Extraordinary General Meeting held 5 April 2012, Fiat Industrial shareholders approved a resolution
for the mandatory conversion of preference and savings shares into ordinary shares at a conversion ratio of
0.700 ordinary shares per preference share and 0.725 ordinary shares per savings share;"
http://www.fiatindustrial.com/en-US/investor_relations/advices/FiatDocuments/Annuncio%20La%20Stampa_Fiat%20Industrial_135x420_ENG.pdf

In the case of Fiat the conversion rate was higher:
"preference shares will be converted into newly issued ordinary shares according to a conversion ratio of 0.850
ordinary shares for each preference share;
n savings shares will be converted into newly issued ordinary shares according to a conversion ratio of 0.875
ordinary shares for each savings share."
http://www.fiatspa.com/en-US/investor_relations/shareholders/FiatDocuments/Punto5_AssemblAzion_UK.pdf

Conversion announced:

Quote
The special meeting of the holders of EXOR savings shares, held today in Turin, approved the mandatory conversion of the preferred and savings shares into ordinary shares, on the basis of a conversion ratio of 1 ordinary share for each preferred or savings share.
The ordinary shares issued in the conversion would be eligible for dividends (to the extent declared) with respect to the 2013 financial results.
The conversion and the related amendments to the bylaws will be submitted to the approval of the General Meeting of EXOR (extraordinary session) called in single call for tomorrow, March 20, 2013.
As previously communicated, the conversion of preferred and savings shares into ordinary shares is conditional upon the cash amount to be paid by the Company pursuant to Article 2437-quater of the Italian Civil Code to the withdrawing shareholders not exceeding €80 million, in the case of the preferred shares, and €20 million in the case of savings shares; provided that in the event that either of these limits is exceeded for any given class, the conversion of both classes of shares will nevertheless become effective if the aggregate cash amount to be paid by the Company for the exercise of the withdrawal rights in respect of both classes does not exceed €100 million.
Title: Re: FIATY - Fiat S.p.A.
Post by: Olmsted on March 20, 2013, 06:55:10 AM
A 1-datapoint “channel check,” for what it is worth:

I test-drove the new 2014 Grand Cherokee Limited, which was apparently the first re-design to have started and finished under Marchionne leadership.  Very nice car, my wife loved it.  He said most of their trade-ins for the Grand Cherokee have been luxury brands (though that may have been part of a sales pitch).

The salesman said that their sales used to be driven by trucks and big cars (Dodge Chargers), but although those sales haven’t declined – Jeep Grand Cherokees and Jeep Wranglers are their main sales engines now.  I was told there was a worldwide shortage of Jeep products; for example dealers are not transferring those to other dealers now (e.g. if a customer wants a color not on the lot) without getting another one in return.  They had heard of plans to build Jeeps in Europe, and are looking forward to that freeing up more US-made Jeeps for the US market.

There was a Fiat section attached to the dealer, carrying 500s.  I was told that prospective customers tend to approach these with skepticism, but have a much better impression after they have driven one.  I was told sales were tepid – but I got the impression that sentiment was just compared to the Chrysler/Dodge/Jeep line (which is not a surprise – there’s only one model available and it’s a bit of a niche for where I live – in pickup truck country).  Apparently dealers’ future allocations of higher-end Fiat products – Alfa Romeos, Maseratis, etc. depend on their current sales of Fiat 500s.  So dealerships are incentivized to move the 500s. 

I asked whether the dealership had heard any chatter about when to expect more Fiat products.  Not really.  Waiting on the cars to jump through all the regulatory hoops – safety, emissions, etc.  Apparently the process for the Fiat 500 took about 3 years.

I’ll be going back for some more car shopping, so let me know if there are some other business questions I can pose.

EDIT: the salesman told me it was a 2014, but this article says it hasn't been unveiled yet.  Hmmm...maybe he mispoke.

http://www.autonews.com/apps/pbcs.dll/article?AID=/20130321/RETAIL01/130329980/jeep-boss-says-another-sales-record-depends-on-new-cherokee#ixzz2OEH1LnsP

(thanks PlanMaestro for the article)

EDIT 2: The salesman wasn't in error.  I was looking at a 2014 Grand Cherokee.  The article is talking about the regular Cherokee. 
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on March 28, 2013, 08:36:02 AM
http://www.bloomberg.com/news/2013-03-28/fiat-seeks-2-5-billion-credit-line-before-chrysler-deal.html (http://www.bloomberg.com/news/2013-03-28/fiat-seeks-2-5-billion-credit-line-before-chrysler-deal.html)



Fiat Seeks $2.5 Billion Credit Line Before Chrysler Deal
Title: Re: FIATY - Fiat S.p.A.
Post by: PLynchJr on March 29, 2013, 05:30:27 AM
Rumors that Audi may be buying Alfa Romeo.

http://www.autoblog.com/2013/03/28/audi-rumored-to-buy-alfa-romeo-officials-deny-it/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+weblogsinc%2Fautoblog+%28Autoblog%29&utm_content=Google+Reader
Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on April 02, 2013, 03:16:20 AM
No, the dividends would be tax exempt (95% exempt) on the Italian side, the way I read it.

https://www.deloitte.com/assets/Dcom-Global/Local%20Assets/Documents/Tax/Taxation%20and%20Investment%20Guides/2012/dttl_tax_highlight_2012_Italy.pdf

Further, Fiat already accesses the cashflow, since they plan their capex together and chrysler does more than half.
Also, it has been indicated, that chrysler could loan money to Fiat, which "might" need VEBA approval. There are many
ways in which they can come around this, at the end of the day, VEBA would like to reach the treshold payment amount.
If Fiat buys the rest of the stake for say 4 bio USD, then the combined entity would be levered around 1xEBITDA (2013,
ex pension leverage). This is maybe doable, but in todays auto-environment it is considered risky - especially since
the spend all of the CF on Capex for 2013/14.

The European car market is viewed very negatively at the moment - maybe too negative. The "hard facts" are:
weak demographics, fleet age much younger than US (8.5 vs 11y) and of course the austerity. So the consensus
is "no recovery till the end of the decade". Especially hit is Peugeot - which sells most of its cars in Southern Europe.
During the credit bubble 2004-2007 they bought all new cars there and will keep them till better times come.
On the other hand, the car companies are very cheap and beaten down and will downsize to the environment.


Fiat already accesses the cashflow? Where did you get that info? Just because they plan capex together doesn't mean Fiat has access to Chrysler's cashflow.

If Chrysler can lend a loan to Fiat, then I don't see how they couldn't merge.

Chrysler Group and Fiat continue to separately manage their own financial matters, including treasury services

Chrysler’s May 2011 credit agreement limits financial support to Fiat (inter alia cumulative limit on dividend payments of $500mn payable only if specified minimum liquidity is met)

Fiat’s 3-year RCF also limits financial support to Chrysler (including limits on guarantees and loans)

p.7

http://www.chryslergroupllc.com/Investor/presentations/other/ChryslerDocuments/Citi%202012%20Credit%20Conference%20Presentation.pdf
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on April 02, 2013, 09:49:01 AM
Major Automakers Enjoy Strong US Monthly Sales in March

http://www.cnbc.com/id/100609345 (http://www.cnbc.com/id/100609345)


Chrysler, a unit of Italian automaker Fiat SpA, said March sales totaled 171,606 vehicles, up 5 percent from 163,381 a year earlier. The Fiat, Dodge, and Ram Truck brands all posted increases.


Chrysler's estimate of the industry's seasonally adjusted annual rate in March is in line with an average SAAR of 15.3 million from a group of analysts polled by Thomson Reuters. Chrysler's total includes about 300,000 heavy-duty vehicles, while the Thomson Reuters poll excluded such vehicles.


Title: Re: FIATY - Fiat S.p.A.
Post by: brker_guy on April 02, 2013, 03:48:58 PM
http://www.autonews.com/apps/pbcs.dll/article?AID=/20130402/RETAIL01/130409990/honda-detroit-3-set-pace-as-march-sales-advance-3#axzz2PLghGG18
Title: Re: FIATY - Fiat S.p.A.
Post by: luck on April 03, 2013, 05:40:40 AM
not sure how material this is, but good to finally see somebody putting out the word a little bit on fiat as a buy:

http://www.cnbc.com/id/100610983
Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on April 07, 2013, 07:02:08 PM
Since the middle of February Exor has been buying back stock. During that time the company has bought around 3.7m shares (common, preferred and saving shares) or about 1.7% of the total shares outstanding for a sum of €81.2m.

They haven't been buying for months and now all of a sudden they start again. We have the FI/CNH merger going through soon and Marchionne talking to banks about financing the merger FIAT and Chrysler.

Just makes me wander...


Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on April 07, 2013, 08:58:20 PM
http://www.4-traders.com/news/Trade-Talks-Spur-Worries-Among-Car-Makers--16582767/

This is some concern. I think this affects Chrysler more than Fiat because Fiat is going all luxury.
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on April 07, 2013, 11:08:21 PM
Since the middle of February Exor has been buying back stock. During that time the company has bought around 3.7m shares (common, preferred and saving shares) or about 1.7% of the total shares outstanding for a sum of €81.2m.

They haven't been buying for months and now all of a sudden they start again. We have the FI/CNH merger going through soon and Marchionne talking to banks about financing the merger FIAT and Chrysler.

Just makes me wander...

Could you elaborate on this?

Thanks
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on April 11, 2013, 08:05:45 AM
http://www.nytimes.com/2013/04/12/business/global/automakers-recall-3-4-million-vehicles-over-air-bags.html?_r=0

Let's look at how the Japanese competitors are doing. The recall problems seem to be endless.
Title: Re: FIATY - Fiat S.p.A.
Post by: claphands22 on April 13, 2013, 12:39:28 PM
Just finished Overhaul.

The author, Steven Rattner, ran the government restructuring of the auto industry. Rattner, has high praise for Sergio Marchionne. Views Marchionne as the supreme workaholic who is passionate and ruthless. I walked away believing Rattner was most impressed with Marchionne -- compared to the other executives.

---
Interestingly, at the end of the book, he points out Jack Welch and Michael Esiner provided out-sized investment returns for shareholders because they were fantastic executives. Intriguing how he juxtaposed this thought with recent praise for Marchionne.
Title: Re: FIATY - Fiat S.p.A.
Post by: siddharth18 on April 14, 2013, 12:44:19 AM
Just finished Overhaul.

The author, Steven Rattner, ran the government restructuring of the auto industry. Rattner, has high praise for Sergio Marchionne. Views Marchionne as the supreme workaholic who is passionate and ruthless. I walked away believing Rattner was most impressed with Marchionne -- compared to the other executives.

---
Interestingly, at the end of the book, he points out Jack Welch and Michael Esiner provided out-sized investment returns for shareholders because they were fantastic executives. Intriguing how he juxtaposed this thought with recent praise for Marchionne.

I watched 60 Minutes' episode on Marchionne and came away very impressed. I've been meaning to read a book on him - so is Overhaul the toi-go book if one wants to read more about him?

Cheers!
Title: Re: FIATY - Fiat S.p.A.
Post by: claphands22 on April 14, 2013, 06:48:49 AM
The author goes through the processes of understanding the auto industry as the book progresses. Not fully, but you learn what disadvantageous the big 3 had and what happened during the crisis that evened out the playing field.

I'd probably not buy the book again to understand Marchionnne but I have horrible buyer's remorse.
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on April 15, 2013, 07:03:57 AM
The author goes through the processes of understanding the auto industry as the book progresses. Not fully, but you learn what disadvantageous the big 3 had and what happened during the crisis that evened out the playing field.

I'd probably not buy the book again to understand Marchionnne but I have horrible buyer's remorse.

Wow, you truly do a ton of research before buying!
Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on April 17, 2013, 03:26:54 PM
I´m beginning to suspect that Giofranchi is actually John Elkann. At least they seem to have the same appetite for good quotes. Elkann´s letter to shareholders is worth a read, including quotes from Ben Graham, J.M. Keynes, Einstein and Mark Twain...I know...sounds like Gio to me.

http://www.exor.com/sito/pdf/4c_en_lettera_presidente.pdf
Title: Re: FIATY - Fiat S.p.A.
Post by: giofranchi on April 22, 2013, 07:15:46 AM
I´m beginning to suspect that Giofranchi is actually John Elkann. At least they seem to have the same appetite for good quotes. Elkann´s letter to shareholders is worth a read, including quotes from Ben Graham, J.M. Keynes, Einstein and Mark Twain...I know...sounds like Gio to me.

http://www.exor.com/sito/pdf/4c_en_lettera_presidente.pdf

Sportgamma,
did you really enjoy the letter? To tell the truth, I didn’t. I enjoy a letter when I find some ideas I hadn’t already thought of, when I can learn something (both Mr. Buffett and Mr. Watsa never fail! And they are not alone!). This, I think, is a good reason to partner with someone: if he is a true master at what he does and, therefore, can teach me a lot about those topics! Instead, if what he says and writes is shallow and has no depth, I leave disappointed and look somewhere else.

My idea of Exor hasn’t really changed: it might be an excellent trading opportunity. But I wouldn’t invest in Exor for the long-term. They have 76% of their GAV, which is 91.5% of their NAV, invested in 4 businesses they will probably never sell. Vice versa, I would treat them all as trading opportunities, when they sell far below IV, to sell them as soon as they approach IV. It automatically follows that I think about Exor the same way!

Finally, the section GROSS DEBT is the reason why a very cheap and very safe source of leverage, like float, is the gift that keeps on giving! And Exor simply cannot benefit from it.

PS
This is not to say that I wouldn’t like to be in Mr. Elkann shoes… ;D Unfortunately, I must admit I have not written that letter!!  :(

giofranchi
Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on April 22, 2013, 08:01:22 AM
I´m beginning to suspect that Giofranchi is actually John Elkann. At least they seem to have the same appetite for good quotes. Elkann´s letter to shareholders is worth a read, including quotes from Ben Graham, J.M. Keynes, Einstein and Mark Twain...I know...sounds like Gio to me.

http://www.exor.com/sito/pdf/4c_en_lettera_presidente.pdf

Sportgamma,
did you really enjoy the letter? To tell the truth, I didn’t. I enjoy a letter when I find some ideas I hadn’t already thought of, when I can learn something (both Mr. Buffett and Mr. Watsa never fail! And they are not alone!). This, I think, is a good reason to partner with someone: if he is a true master at what he does and, therefore, can teach me a lot about those topics! Instead, if what he says and writes is shallow and has no depth, I leave disappointed and look somewhere else.

My idea of Exor hasn’t really changed: it might be an excellent trading opportunity. But I wouldn’t invest in Exor for the long-term. They have 76% of their GAV, which is 91.5% of their NAV, invested in 4 businesses they will probably never sell. Vice versa, I would treat them all as trading opportunities, when they sell far below IV, to sell them as soon as they approach IV. It automatically follows that I think about Exor the same way!

Finally, the section GROSS DEBT is the reason why a very cheap and very safe source of leverage, like float, is the gift that keeps on giving! And Exor simply cannot benefit from it.

PS
This is not to say that I wouldn’t like to be in Mr. Elkann shoes… ;D Unfortunately, I must admit I have not written that letter!!  :(

giofranchi

I can honestly say that I did enjoy the letter. I think he did a good job on:
1. Explaining their business
2. Communicating what their plan is
3. Being frank and admitting mistakes
4. Alerting the shareholder of the risks involved

By these measures I think he did well. Or maybe I´m just blinded by the fact that my exor share are up 38% (in €) since I bought.

Title: Re: FIATY - Fiat S.p.A.
Post by: giofranchi on April 22, 2013, 08:21:50 AM
I can honestly say that I did enjoy the letter. I think he did a good job on:
1. Explaining their business
2. Communicating what their plan is
3. Being frank and admitting mistakes
4. Alerting the shareholder of the risks involved

By these measures I think he did well. Or maybe I´m just blinded by the fact that my exor share are up 38% (in €) since I bought.

Well, he admitted they made a mistake in a 0.76% of NAV investment? Easy enough, right?
Anyway, a 38% return is really impressive! Congratulations! But discount to NAV surely must be narrowing now. Isn’t it? So, what are you going to do? Will you let your capital compound in Exor, or will you cash in your very satisfying profits and look somewhere else? In other words, do you see Exor as a long-term investment, or just as a very successful trading opportunity, whose thesis is playing out exactly the way you expected?

giofranchi
Title: Re: FIATY - Fiat S.p.A.
Post by: giofranchi on April 22, 2013, 08:28:48 AM
Sportgamma,
I am asking just because on the one hand I would really love to expand my circle of competence and to come to know another business that I could reckon a very good and reliable long-term investment, on the other hand, though, I have pretty high standards and don’t want to lower them…  ::)
Thank you,

giofranchi
Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on April 23, 2013, 05:16:52 AM
Since the middle of February Exor has been buying back stock. During that time the company has bought around 3.7m shares (common, preferred and saving shares) or about 1.7% of the total shares outstanding for a sum of €81.2m.

They haven't been buying for months and now all of a sudden they start again. We have the FI/CNH merger going through soon and Marchionne talking to banks about financing the merger FIAT and Chrysler.

Just makes me wander...

Could you elaborate on this?

Thanks

Its just a gut feeling.

However,
1. we know that the catalyst concerning the dispute between VEBA and FIAT is imminent
2. Also, the merger between FI/CHN
3. Exor is still trading at a discount to a marked-to-market book value

The way I read into this is that they expect the market-to-market book value to rise soon (the authorisation has been there for almost a year, but they only recently started buying).

Another explanation is that they are using the proceeds from the debt issuance to buy back shares.


Quote
Well, he admitted they made a mistake in a 0.76% of NAV investment? Easy enough, right?
Anyway, a 38% return is really impressive! Congratulations! But discount to NAV surely must be narrowing now. Isn’t it? So, what are you going to do? Will you let your capital compound in Exor, or will you cash in your very satisfying profits and look somewhere else? In other words, do you see Exor as a long-term investment, or just as a very successful trading opportunity, whose thesis is playing out exactly the way you expected?

giofranchi

Gio,

Indeed discount to NAV is has narrowed considerably.

Exor was an unorthodox pick for me because normally when I go for special situations, I want to have a clear view of the timing of the catalyst. Hower, Exor was more of a generally undervalued category stock, but with a multiple value enhancing catalysts albeit with an unclear timing.

As things have progressed I have become more and more impressed with Elkann and Marchionne and with Exor in general. They are value oriented, overcapitalised and opportunistic. As you point out, 76% of GAV is in four companies that they exercise some control over. Two of those companies are capital intensive, cyclical and quite risky enterprises. So my line of thinking is much more oriented towards how they will allocate capital that they will pull out of existing businesses to new ventures.

So, to answer your question, I see Exor as an owner-operator holding company that I would like to hold onto for the long term (however I am not expecting a 40% annual return. I´m not thinking of adding to my stake at these prices, if I add it will be directly in FIAT.

Title: Re: FIATY - Fiat S.p.A.
Post by: giofranchi on April 23, 2013, 05:37:41 AM
As things have progressed I have become more and more impressed with Elkann and Marchionne and with Exor in general. They are value oriented, overcapitalised and opportunistic. As you point out, 76% of GAV is in four companies that they exercise some control over. Two of those companies are capital intensive, cyclical and quite risky enterprises. So my line of thinking is much more oriented towards how they will allocate capital that they will pull out of existing businesses to new ventures.

So, to answer your question, I see Exor as an owner-operator holding company that I would like to hold onto for the long term (however I am not expecting a 40% annual return. I´m not thinking of adding to my stake at these prices, if I add it will be directly in FIAT.

Thank you Sportgamma,
I will have to think about it much more carefully! :)

giofranchi
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on April 23, 2013, 06:54:26 AM
For what it's worth, UBS upgraded from Neutral to Buy.

Date for hearing 25 april.
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on April 24, 2013, 08:26:27 AM
Fiat Weighs Buying Rest of Chrysler and U.S. IPO .


http://online.wsj.com/article/SB10001424127887324474004578442654204386618.html?mod=WSJ_hpp_LEFTTopStories#articleTabs%3Darticle
Title: Re: FIATY - Fiat S.p.A.
Post by: claphands22 on April 24, 2013, 08:51:45 AM
Thanks for the post. Looks like Fiat will buyout Chrysler with extra debt then IPO the combined company in the USA. Also wouldn't be surprised if they move the headquarters to the US and change the company name to Chrysler, similar to what they are doing with Fiat industrial.

Fiat could be a home run, question if they can get margins up. Which depends on higher new car sells in Europe and how successful their luxury brands will be.

Trying to make a reasonable prediction of the car industry in the next 5-10 years seems fool hardy. Maybe I am making a mistake with following Fiat...
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on April 24, 2013, 08:56:09 AM
Thanks for the post. Looks like Fiat will buyout Chrysler with extra debt then IPO the combined company in the USA. Also wouldn't be surprised if they move the headquarters to the US and change the company name to Chrysler, similar to what they are doing with Fiat industrial.

Fiat could be a home run, question if they can get margins up. Which depends on higher new car sells in Europe and how successful their luxury brands will be.

Trying to make a reasonable prediction of the car industry in the next 5-10 years seems fool hardy. Maybe I am making a mistake with following Fiat...

Yeah. Making macro predictions is too hard. Look at when Wilbur Ross started buying XCO when gas price was supposed to bottom out at $6 in 2011.
The only things we can do is to get some rough idea of the macro so at least we are not totally blind, and then get a significant MoS on our picks.
Overall, we know the pent up demand is huge for trucks, and we know that the global economy seems ok. If there is another crisis, truck sales will go down and auto makers will get hammered again. If there is not, then we will probably be fine.
Title: Re: FIATY - Fiat S.p.A.
Post by: claphands22 on April 24, 2013, 09:09:12 AM
One "macro" thing I worry about is Fiat's profits from Brazil. Read some articles about Brazilians with too much consumer debt. Wonder if too cheap of financing is boosting their profits to an unsustainable level.





Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on April 24, 2013, 11:44:30 AM
One "macro" thing I worry about is Fiat's profits from Brazil. Read some articles about Brazilians with too much consumer debt. Wonder if too cheap of financing is boosting their profits to an unsustainable level.

Fiat is the leader in Brazil. If a crisis comes in, GM and Ford and all other competitors in Brazil will be killed first. The question is whether this is enough to kill Fiat. If not, then after the crisis, things will only be better.
Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on April 24, 2013, 02:27:49 PM
Marchionne on capital allocation (won´t dilute stock as it is undervalued, will take advantage of interest rate environment) and a potential Fiat Chrysler merger deal:

http://www.businessweek.com/videos/2013-04-09/marchionne-says-fiat-has-cash-to-purchase-chrysler
Title: Re: FIATY - Fiat S.p.A.
Post by: brker_guy on April 24, 2013, 04:41:31 PM
http://www.autonews.com/article/20130424/COPY01/304249684/fiat-weighs-new-york-listing-after-chrysler-merger-report-says&cciid=email-autonews-daily#axzz2RQWKgoL8
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on April 25, 2013, 08:06:27 AM
Marchionne on capital allocation (won´t dilute stock as it is undervalued, will take advantage of interest rate environment) and a potential Fiat Chrysler merger deal:

http://www.businessweek.com/videos/2013-04-09/marchionne-says-fiat-has-cash-to-purchase-chrysler

Potential sale of Ferrari?
If they sell Ferrari, that could harm their strategy to turn around Maserati and Alfa. Currently Ferrari is helping those two kids to grow up.
Oh, I just listened to the video. Ferrari is not for sale. That is great.
Title: Re: FIATY - Fiat S.p.A.
Post by: LC on April 25, 2013, 08:37:18 AM
Marchionne obviously knows Ferrari is worth a ton brand-wise. The question in my mind is not so much the details surrounding a Chrysler deal, but Alfa Romeo.

As he said, they need to rebuild Alfa Romeo the brand from scratch. I'm not sure if that is possible. The "economic climate" in Europe probably isn't conducive to that, either. Then again, I am no marketing expert - I just figure that when budgets are tightened in Europe, how easily can a car manufacturer produce and market a new brand?
Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on April 25, 2013, 08:51:41 AM
Marchionne obviously knows Ferrari is worth a ton brand-wise. The question in my mind is not so much the details surrounding a Chrysler deal, but Alfa Romeo.

As he said, they need to rebuild Alfa Romeo the brand from scratch. I'm not sure if that is possible. The "economic climate" in Europe probably isn't conducive to that, either. Then again, I am no marketing expert - I just figure that when budgets are tightened in Europe, how easily can a car manufacturer produce and market a new brand?

http://www.edmunds.com/car-news/us-is-key-to-alfa-romeo-revival-says-marchionne.html

The U.S. is the key to Alfa Romeo's revival, said Fiat CEO Sergio Marchionne at the 2013 Geneva Auto Show, as he dismissed criticism that previous Alfa revival plans have come to nothing here.

Marchionne said previous attempts to revive Alfa in the U.S. "never got executed." Marchionne spoke to reporters at a roundtable event here.

The 2014 Alfa Romeo 4C, which commanded much of the spotlight at the Geneva show, will spearhead the reintroduction of the brand in the U.S.

"A very solid alliance with Chrysler with a dealer network, the Chrysler infrastructure and the sharing of outstanding model platforms" is the key to Alfa Romeo's return to the U.S., Marchionne said.

He added: "It couldn't have been done before — the baseline investment would have exceeded the revenue."

As for the cars themselves, future Alfa Romeos will have three core characteristics.

"First, design," Marchionne said. "Second, the light-weighting of its vehicles and third, unique powertrain solutions. And we have met the target with the 4C."

-----

But Marchionne is less certain about how Alfa Romeo can achieve a revival in Europe.

"I don't know at today's price levels," he said, referring to today's heavy discounting. "The degradation of prices is occurring not just in the mass market, but the premium end, too."
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on April 29, 2013, 11:42:40 AM
http://online.wsj.com/article/SB10001424127887323982704578452634164658240.html
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on April 29, 2013, 12:11:14 PM
http://www.forbes.com/sites/dalebuss/2013/04/29/fiat-seeks-market-relevant-value-for-veba-chrysler-stake/ (http://www.forbes.com/sites/dalebuss/2013/04/29/fiat-seeks-market-relevant-value-for-veba-chrysler-stake/)

Fiat Seeks 'Market-Relevant' Value For VEBA Chrysler Stake
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on April 29, 2013, 12:23:22 PM
http://dealbook.nytimes.com/2013/04/29/how-a-fiat-chrysler-merger-could-work/ (http://dealbook.nytimes.com/2013/04/29/how-a-fiat-chrysler-merger-could-work/)

How a Fiat-Chrysler Merger Could Work
Title: Re: FIATY - Fiat S.p.A.
Post by: nsa122 on May 01, 2013, 06:00:53 PM
How are you all valuing Fiat, given the big unknowns?  Here is my stab in the dark.

Currently, market cap $7B and net industrial debt $7B (per recent Fiat IR presentation).
 
Parts:
Chrysler- Fiat's stake worth $5-6B based on VEBA negotiations. 
Ferrari- $4-5B?--10x 2012 trading profit (355m euro)
Maserati- $500M? 8x 2012 trading profit (43M euro)
Fiat per se- This seems like the big make or break part that is still uncertain.

For those who own it, are you valuing the company this way or on a consolidated basis?

Thanks in advance.
Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on May 02, 2013, 02:46:22 PM
http://www.zerohedge.com/news/2013-03-17/where-channel-stuffed-german-cars-go-die
Title: Re: FIATY - Fiat S.p.A.
Post by: plato1976 on May 04, 2013, 06:09:53 PM
In case you guys didn't read:


http://www.gwinvestors.com/Main/Blog/Entries/2013/5/2_Fiat_SpA_(F_IM)__The_Bottom.html
Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on May 06, 2013, 05:52:33 AM
In case you guys didn't read:


http://www.gwinvestors.com/Main/Blog/Entries/2013/5/2_Fiat_SpA_(F_IM)__The_Bottom.html

Thanks for the update.

I must say that this stuff really baffles me. What am I missing here? The value of Ferrari alone is equal to the current share price and a conservative value of the Chrysler stake is €5.80 per Fiat share...Thats the downside scenario. What I found particularly interesting was that they actually discussed this with Marchionne:

Quote
The Agnelli Family (which owns 31% of Fiat through Exor SpA [EXO IM]) and venerable CEO Sergio Marchionne (history of turning around SGS SA, Fiat Industrial, Fiat in 2004, and of course Chrysler) have purposefully kept Fiat’s debt structure totally unsecured, with the ability to sell or distribute assets freely.  In our meeting with Marchionne last summer, he suggested in a nightmare European scenario, the highly profitable South American operations of Fiat could be sold to Chrysler and European operations simply shut-down to stop the bleeding.  A distribution of Ferrari stock, which alone is worth roughly the same price as Fiat’s stock today (using recent Aston Martin sale metrics), is not restricted by Fiat’s bond indentures, and has been discussed as likely after the merger between Chrysler and Fiat.

The valuation does not touch specifically on the potential value that Marchionne & co might create for Fiat shareholders by getting a good deal for the rest of Chrysler in terms of purchase price and funding. Bear in mind that the price of the stake actually has a ceiling as according to the equity recapture option.   
Title: Re: FIATY - Fiat S.p.A.
Post by: Olmsted on May 06, 2013, 07:04:14 AM
I originally thought the "distribute Ferrari and Chrysler shares directly to shareholders" scenario was value-investor sum-of-the-parts fantasy.  Theoretically possible, but not going to happen.  But I didn't realize they actually got that scenario from Marchionnne.  Wow!  Great CEO.
Title: Re: FIATY - Fiat S.p.A.
Post by: Parsad on May 06, 2013, 02:47:10 PM
Some of you may like this:

Hi Sanjeev,

...Taken on Sunday morning in Omaha. With John Elkann (Chairman of Fiat). Fiat owns Ferrari and John came to the Berkshire Managers’ Brunch in the Ferrari behind us. I left a gap between John and me so we didn’t cover the logo!

Warmly,

Mohnish Pabrai


Cheers!
Title: Re: FIATY - Fiat S.p.A.
Post by: plato1976 on May 06, 2013, 03:32:48 PM
At this moment, to make it a really large position, I only need to understand the reason of this market ineffciency ...
looks like it's just the Euro drag but we could be missing sth important
Tried my best to kill this idea but seems it will survive in a very pessimistic environment

In case you guys didn't read:


http://www.gwinvestors.com/Main/Blog/Entries/2013/5/2_Fiat_SpA_(F_IM)__The_Bottom.html

Thanks for the update.

I must say that this stuff really baffles me. What am I missing here? The value of Ferrari alone is equal to the current share price and a conservative value of the Chrysler stake is €5.80 per Fiat share...Thats the downside scenario. What I found particularly interesting was that they actually discussed this with Marchionne:

Quote
The Agnelli Family (which owns 31% of Fiat through Exor SpA [EXO IM]) and venerable CEO Sergio Marchionne (history of turning around SGS SA, Fiat Industrial, Fiat in 2004, and of course Chrysler) have purposefully kept Fiat’s debt structure totally unsecured, with the ability to sell or distribute assets freely.  In our meeting with Marchionne last summer, he suggested in a nightmare European scenario, the highly profitable South American operations of Fiat could be sold to Chrysler and European operations simply shut-down to stop the bleeding.  A distribution of Ferrari stock, which alone is worth roughly the same price as Fiat’s stock today (using recent Aston Martin sale metrics), is not restricted by Fiat’s bond indentures, and has been discussed as likely after the merger between Chrysler and Fiat.

The valuation does not touch specifically on the potential value that Marchionne & co might create for Fiat shareholders by getting a good deal for the rest of Chrysler in terms of purchase price and funding. Bear in mind that the price of the stake actually has a ceiling as according to the equity recapture option.
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on May 06, 2013, 03:42:23 PM
Some of you may like this:

Hi Sanjeev,

...Taken on Sunday morning in Omaha. With John Elkann (Chairman of Fiat). Fiat owns Ferrari and John came to the Berkshire Managers’ Brunch in the Ferrari behind us. I left a gap between John and me so we didn’t cover the logo!

Warmly,

Mohnish Pabrai


Cheers!


Who is the guy on the left? For a second there, I thought he was Michael Burry...
Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on May 06, 2013, 03:42:55 PM
Some of you may like this:

Hi Sanjeev,

...Taken on Sunday morning in Omaha. With John Elkann (Chairman of Fiat). Fiat owns Ferrari and John came to the Berkshire Managers’ Brunch in the Ferrari behind us. I left a gap between John and me so we didn’t cover the logo!

Warmly,

Mohnish Pabrai


Cheers!

Parsad,

Don´t mean to pry (read: I actually do mean to pry), but mind elaborating on why Mohnish found the urge to share him meeting Elkann. I´m guessing he met lots of interesting people last weekend (read: have you guys been discussing Fiat perchance?).

Man, would I have wanted to observe those two talking...
Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on May 06, 2013, 03:44:27 PM
Some of you may like this:

Hi Sanjeev,

...Taken on Sunday morning in Omaha. With John Elkann (Chairman of Fiat). Fiat owns Ferrari and John came to the Berkshire Managers’ Brunch in the Ferrari behind us. I left a gap between John and me so we didn’t cover the logo!

Warmly,

Mohnish Pabrai


Cheers!


Who is the guy on the left? For a second there, I thought he was Michael Burry...

I think its Guy Spier
Title: Re: FIATY - Fiat S.p.A.
Post by: Parsad on May 06, 2013, 03:52:06 PM
Some of you may like this:

Hi Sanjeev,

...Taken on Sunday morning in Omaha. With John Elkann (Chairman of Fiat). Fiat owns Ferrari and John came to the Berkshire Managers’ Brunch in the Ferrari behind us. I left a gap between John and me so we didn’t cover the logo!

Warmly,

Mohnish Pabrai


Cheers!

Parsad,

Don´t mean to pry (read: I actually do mean to pry), but mind elaborating on why Mohnish found the urge to share him meeting Elkann. I´m guessing he met lots of interesting people last weekend (read: have you guys been discussing Fiat perchance?).

Man, would I have wanted to observe those two talking...

Because we have fun screwing around with you guys!   ;D 

I don't know why he sent it to me...you guys are going to have to ask him if it is of any significance or coincidence.  His AGM is coming up in a few months, so I'm sure the question will be broached by someone from here.  Cheers!
Title: Re: FIATY - Fiat S.p.A.
Post by: Parsad on May 06, 2013, 03:53:10 PM
Some of you may like this:

Hi Sanjeev,

...Taken on Sunday morning in Omaha. With John Elkann (Chairman of Fiat). Fiat owns Ferrari and John came to the Berkshire Managers’ Brunch in the Ferrari behind us. I left a gap between John and me so we didn’t cover the logo!

Warmly,

Mohnish Pabrai


Cheers!


Who is the guy on the left? For a second there, I thought he was Michael Burry...

Nope, that's the lovely Mr. Spiers...the Edge to Mohnish's Bono!   ;D  Cheers!
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on May 06, 2013, 04:20:25 PM
John Elkann … wow. I guess this is some sort of punishment for not going to religious gatherings. Mea culpa, mea culpa, mea maxima culpa.

PS: The Ferrari FF is cool but is not a real Ferrari.
Title: Re: FIATY - Fiat S.p.A.
Post by: txlaw on May 06, 2013, 04:33:03 PM
Some of you may like this:

Hi Sanjeev,

...Taken on Sunday morning in Omaha. With John Elkann (Chairman of Fiat). Fiat owns Ferrari and John came to the Berkshire Managers’ Brunch in the Ferrari behind us. I left a gap between John and me so we didn’t cover the logo!

Warmly,

Mohnish Pabrai


Cheers!

Parsad,

Don´t mean to pry (read: I actually do mean to pry), but mind elaborating on why Mohnish found the urge to share him meeting Elkann. I´m guessing he met lots of interesting people last weekend (read: have you guys been discussing Fiat perchance?).

Man, would I have wanted to observe those two talking...

Could be because he knows people on the board are in interested in Fiat and because there was some speculation that Pabrai owned Fiat and had referenced it in a talk (I think Plan first mentioned Fiat as a possibility). 
Title: Re: FIATY - Fiat S.p.A.
Post by: Parsad on May 06, 2013, 04:48:53 PM
John Elkann … wow. I guess this is some sort of punishment for not going to religious gatherings. Mea culpa, mea culpa, mea maxima culpa.

PS: The Ferrari FF is cool but is not a real Ferrari.

I agree.  Looks like a Hyundai Veloster!  Cheers!
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on May 06, 2013, 05:51:50 PM
Some of you may like this:

Hi Sanjeev,

...Taken on Sunday morning in Omaha. With John Elkann (Chairman of Fiat). Fiat owns Ferrari and John came to the Berkshire Managers’ Brunch in the Ferrari behind us. I left a gap between John and me so we didn’t cover the logo!

Warmly,

Mohnish Pabrai



Cheers!

Oh, you are a friend of Mohnish?!
Title: Re: FIATY - Fiat S.p.A.
Post by: brker_guy on May 06, 2013, 06:25:50 PM
I saw this Ferrari at the Hilton on Sunday after the Markel Meeting.  It was parked right in the front.
Title: Re: FIATY - Fiat S.p.A.
Post by: Parsad on May 06, 2013, 06:43:28 PM
Some of you may like this:

Hi Sanjeev,

...Taken on Sunday morning in Omaha. With John Elkann (Chairman of Fiat). Fiat owns Ferrari and John came to the Berkshire Managers’ Brunch in the Ferrari behind us. I left a gap between John and me so we didn’t cover the logo!

Warmly,

Mohnish Pabrai



Cheers!

Oh, you are a friend of Mohnish?!

Yes...he's one of the greatest guys I know.  Cheers!
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on May 06, 2013, 06:50:08 PM
Some of you may like this:

Hi Sanjeev,

...Taken on Sunday morning in Omaha. With John Elkann (Chairman of Fiat). Fiat owns Ferrari and John came to the Berkshire Managers’ Brunch in the Ferrari behind us. I left a gap between John and me so we didn’t cover the logo!

Warmly,

Mohnish Pabrai



Cheers!

Oh, you are a friend of Mohnish?!

Yes...he's one of the greatest guys I know.  Cheers!

Wow! Does he go to this forum too?
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on May 06, 2013, 11:41:17 PM
btw: I have a weird feeling that fiat is Pabrai 's secret 40x holding, as some suspected ...
Guess I will build a tiny position in this pullback and then study more - the europe market is a real headache

Guy Spier.

http://www.forbes.com/sites/halahtouryalai/2012/11/26/best-ideas-2013-show-some-love-for-fiat-the-stock-could-double/

Blasts from the past
Title: Re: FIATY - Fiat S.p.A.
Post by: hellsten on May 07, 2013, 12:40:44 AM
In case you guys didn't read:

http://www.gwinvestors.com/Main/Blog/Entries/2013/5/2_Fiat_SpA_(F_IM)__The_Bottom.html

Thank you. This thread and the GreenWood Investor article are a great read.

Regarding FIATY, I even like the nightmare scenario outlined in this presentation:
http://www.gwinvestors.com/Main/Resources_files/2013%20Q1%20Investor%20Call%20Presentation%20%28High%20Res%29.pdf

Quote
Fiat SpA Nightmare scenario In the event of a Euro Disaster:
• Bondholders cannot block the distribution of Chrysler and Ferrari shares to current shareholders
• Both assets alone are worth more than the stock’s price

I'm wondering though if there's something I've failed to understand; mainly if there's something that can kill FIATY. In any case, I'm comfortable investing alongside EXOR. If Guy and Mohnish own the stock then I'm even more happy.

And thanks Sanjeev for sharing the picture of Guy, Mohnish and John Elkann :)
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on May 07, 2013, 12:45:25 AM
Quote
FIAT (€4.6; Reduce) / FIAT INDUSTRIAL (€8.5; Buy): Investing €5.7bn in Brazil by 2016
 
After a meeting with Dilma Rousseff, Sergio Marchionne (CEO of Fiat and Chrysler and Chairman of Fiat Industrial) announced an investment plan for Brazil totalling BRL15bn (€5.7bn) between now and 2016. For Fiat, this investment will enable the construction of a plant in the state of Pernambuco whose production capacity should reach 250,000 units from 2015. It will also enable the raising of capacity at the existing plant at Betim (Minas Gerais state) from 800,000 to 950,000 units a year by 2014.

As for Fiat Industrial, the plan will mean the start-up of defence vehicle assembly at the Sete Lagoas plant (Minas Gerais state), which currently makes Magirus vehicles (fire trucks, in particular). The CNH tractor factory at Curitiba will also be expanded.

The amounts invested will furthermore bolster the two groups' R&D. Sergio Marchionne reckons that the total investment will create 7700 new direct jobs and 12,000 indirect jobs.

Part of this plan (BRL9bn, i.e. €3.4bn) had already been announced as part of the 2011-2014 plan. The additional BRL6bn (€2.3bn) was added yesterday. The breakdown of the total between Fiat and Fiat Industrial has not yet been indicated.

In any case, these investments form part of a natural process of expansion in a market which is very important for both groups, where localising production means that heavy supertaxes can be avoided. Note that we are expecting the Brazilian auto market to advance by an average of 5% over the next few years. Fiat is currently number one in Brazil with a market share of 22.7% (passenger cars + light trucks). As for Fiat Industrial, the planned investments will enable Iveco to consolidate its positions and beef up its locally produced offering. Furthermore, CNH is to develop its production capacities to make the most of the market boom (+33% in Q1 13; +10%-20%e in 2013) and to hold on to its number one position (44% market share).
 
Title: Re: FIATY - Fiat S.p.A.
Post by: hellsten on May 07, 2013, 01:22:52 AM
Bank of America/Merrill Lynch analysis:
Quote
Our price objective of EUR2.00 (US$2.71/ADR) is based on comprehensive DCF analysis.

Source:
http://www.borsaitaliana.it/documenti/studi.htm?filename=98420.pdf
Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on May 07, 2013, 05:58:41 AM
Bank of America/Merrill Lynch analysis:
Quote
Our price objective of EUR2.00 (US$2.71/ADR) is based on comprehensive DCF analysis.

Source:
http://www.borsaitaliana.it/documenti/studi.htm?filename=98420.pdf

Thanks for posting

This report pegs the value of Ferrari stake at €2.4B, referring to the transaction of a 5% stake from Mubadala:
Quote
Fiat has paid €122 million (Dh612.8m) to buy back the 5 per cent stake in Ferrari that was sold five years ago to Mubadala Development, the investment company owned by the Abu Dhabi Government.

...

Mubadala bought the 5 per cent stake in Ferrari in 2005 for a reported €114m, which suggests the company made an €8m profit on the transaction. At the time Ferrari was valued at about €2.3 billion.
http://www.thenational.ae/lifestyle/motoring/fiat-buys-back-ferrari-stake-from-mubadala#ixzz2SbohXbhX

They also use a 1.6 EBIT multiple for the EV of the Chrysler stake, but their estimate of EBIT is much higher than that of GW (3.3 vs 2.1).

The DCF analysis assumes a straight line 2.8% NOPAT margin over 10 years, which means that they are not considering the effects of leverage on NOPAT.
Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on May 07, 2013, 08:46:18 AM
http://skiddmark.com/2013/03/the-truth-about-ferraris-brand-power/

Quote
When Ferrari are separated out, we see an enterprise value (EV) of $6.01 billion with their brand accounting for 61% of that – $3.64 billion.

To put that in perspective, looking through the list of premium automotive brands, we have BMW and Daimler-Benz with brand power values of 22% and 21% respectively. Both companies are heavily leveraged (with high levels of debt financing their growth), hence their high EVs of $104.5 billion and $95.0 billion each (compared with market caps of $58 billion and $56 billion). Volkswagen Group are in a similar position, $100.7 billion enterprise value with a brand power of 24% – which reflects the considerable investment they’ve also made in their future business.
Unsurprisingly, Ferrari’s nearest competitor is Porsche. With a year-on-year sales increase in February of 18.2 per cent (30.5 per cent in the U.S.), the German powerhouse delivers a brand power of 43% on an enterprise value of $26.1 billion.
Title: Re: FIATY - Fiat S.p.A.
Post by: claphands22 on May 07, 2013, 09:02:38 AM
Bank of America/Merrill Lynch analysis:
Quote
Our price objective of EUR2.00 (US$2.71/ADR) is based on comprehensive DCF analysis.

Source:
http://www.borsaitaliana.it/documenti/studi.htm?filename=98420.pdf

Thanks for posting

This report pegs the value of Ferrari stake at €2.4B, referring to the transaction of a 5% stake from Mubadala:
Quote
Fiat has paid €122 million (Dh612.8m) to buy back the 5 per cent stake in Ferrari that was sold five years ago to Mubadala Development, the investment company owned by the Abu Dhabi Government.

...

Mubadala bought the 5 per cent stake in Ferrari in 2005 for a reported €114m, which suggests the company made an €8m profit on the transaction. At the time Ferrari was valued at about €2.3 billion.
http://www.thenational.ae/lifestyle/motoring/fiat-buys-back-ferrari-stake-from-mubadala#ixzz2SbohXbhX

They also use a 1.6 EBIT multiple for the EV of the Chrysler stake, but their estimate of EBIT is much higher than that of GW (3.3 vs 2.1).

The DCF analysis assumes a straight line 2.8% NOPAT margin over 10 years, which means that they are not considering the effects of leverage on NOPAT.

Here is the PDF, quite a pain to view it via their Java applet.

Hope the market starts to believe Fiat is worth €2.00 a share.
Title: Re: FIATY - Fiat S.p.A.
Post by: berkshiremystery on May 07, 2013, 10:16:42 AM
Some of you may like this:

Hi Sanjeev,

...Taken on Sunday morning in Omaha. With John Elkann (Chairman of Fiat). Fiat owns Ferrari and John came to the Berkshire Managers’ Brunch in the Ferrari behind us. I left a gap between John and me so we didn’t cover the logo!

Warmly,

Mohnish Pabrai



Cheers!

Oh, you are a friend of Mohnish?!

Yes...he's one of the greatest guys I know.  Cheers!

Wow! Does he go to this forum too?

Mohnish was actually posting 2 or 3 times at the old predecessor forum, the MSN Berkshire Hathaway Shareholders message board. I barely recall, but I remember that he actually responded to one of my postings in a thread about him, after I teased him with some SEC filing about one of his purchases. He was in earlier years posting on the Fool.com occasionally. He also comes to Toronto to the Fairfax AGM and this boards shareholder dinner. Actually Prem Watsa is also a major doner at Pabrai's Dakshana Foundation and an advisory board member. So, I bet for sure, Mohnish still seems to be some permanent silent reader of this forum here. Prem, Francis, Guy Spier and also Allan Mecham are aware of this forum.
Title: Re: FIATY - Fiat S.p.A.
Post by: MYDemaray on May 07, 2013, 01:17:25 PM
http://dealbook.nytimes.com/2013/05/07/hasty-deal-to-save-chrysler-in-depths-of-crisis-returns-to-haunt/
Title: Re: FIATY - Fiat S.p.A.
Post by: jay21 on May 07, 2013, 01:25:32 PM
http://dealbook.nytimes.com/2013/05/07/hasty-deal-to-save-chrysler-in-depths-of-crisis-returns-to-haunt/

Thanks a lot for posting this.  I am starting my due diligence and the deal with Chrysler is what most caught my eye.
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on May 08, 2013, 07:00:42 PM
http://www.reuters.com/article/2013/05/08/ferrari-production-idUSL6N0DP36R20130508
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on May 09, 2013, 01:35:10 PM
http://skiddmark.com/2013/03/the-truth-about-ferraris-brand-power/
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on May 09, 2013, 11:11:09 PM
Interesting, thanks!
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on May 10, 2013, 08:44:28 AM
http://skiddmark.com/2013/03/the-truth-about-ferraris-brand-power/

This is one of the niche brand that could keep raising prices.
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on May 10, 2013, 01:55:04 PM
http://autos.yahoo.com/photos/behind-the-scenes-at-ferrari-slideshow/behind-the-scenes-at-ferrari-photo--2018515380.html
http://autos.yahoo.com/blogs/motoramic/ferrari-cuts-production-2013-vows-never-build-electric-130344501.html
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on May 11, 2013, 04:47:26 PM
http://www.nytimes.com/2013/05/12/business/recall-of-nearly-500000-jeeps-announced-by-chrysler.html?ref=business&_r=0 (http://www.nytimes.com/2013/05/12/business/recall-of-nearly-500000-jeeps-announced-by-chrysler.html?ref=business&_r=0)

Big Recall for Jeeps Announced by Chrysler
Title: Re: FIATY - Fiat S.p.A.
Post by: hellsten on May 12, 2013, 02:25:57 AM
Fiat Spa: Love For Sale (F.Mi) by Steven Wood, GreenWood Investors LLC:
http://valueinvestingchallenge.com/d/c/h/0CCIQFjAzDRJKOTFmXSAW/VIChallenge-FMI-StevenWood.pdf
Title: Re: FIATY - Fiat S.p.A.
Post by: sampr01 on May 12, 2013, 10:56:06 AM
Are you guys buying FIATY on OTC or F.MI.  :), any difference?. Thanks
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on May 13, 2013, 12:41:05 PM
At Chrysler-Fiat 'it's all about differentiating the brands'
http://www.autonews.com/article/20130513/RETAIL03/305139994#ixzz2TCf4pvlR
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on May 15, 2013, 03:18:43 AM
Above 5 (EUR) today
Title: Re: FIATY - Fiat S.p.A.
Post by: jch548 on May 15, 2013, 07:11:19 AM
Can't find any news. Up on heavy volumn. FT says avg volumn is 15mm shares. Over 50mm today.

Maybe leakage from the VEBA case?
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on May 15, 2013, 07:13:09 AM
Or technical buying once it touched 5
Title: Re: FIATY - Fiat S.p.A.
Post by: indirect on May 15, 2013, 07:30:25 AM
Read the transcript from Veba case ongoing. Fiat case seems strong.
Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on May 15, 2013, 07:32:44 AM
Read the transcript from Veba case ongoing. Fiat case seems strong.

A link to the document would be much appreciated.

TiA,

Gisli
Title: Re: FIATY - Fiat S.p.A.
Post by: berkshiremystery on May 15, 2013, 10:22:59 AM
Some of you may like this:

Hi Sanjeev,

...Taken on Sunday morning in Omaha. With John Elkann (Chairman of Fiat). Fiat owns Ferrari and John came to the Berkshire Managers’ Brunch in the Ferrari behind us. I left a gap between John and me so we didn’t cover the logo!

Warmly,

Mohnish Pabrai


Cheers!

Parsad,

Don´t mean to pry (read: I actually do mean to pry), but mind elaborating on why Mohnish found the urge to share him meeting Elkann. I´m guessing he met lots of interesting people last weekend (read: have you guys been discussing Fiat perchance?).

Man, would I have wanted to observe those two talking...

Could be because he knows people on the board are in interested in Fiat and because there was some speculation that Pabrai owned Fiat and had referenced it in a talk (I think Plan first mentioned Fiat as a possibility).

For sure,... Mohnish has shares of Fiat S.p.A. in his funds, as of Dec. 31, 2012. His average purchases at costs should be around something in the $4.70 - 4.80 range. Cheers!

Pabrai Investment Fund 2, June 30, 2012
Fiat S.p.A. (11.48%)

Pabrai Investment Fund 3, Dec. 31, 2012
Fiat S.p.A. (13.70%)

Pabrai Investment Fund 4, Dec. 31, 2012
Fiat S.p.A. (12.67%)

Title: Re: FIATY - Fiat S.p.A.
Post by: brker_guy on May 15, 2013, 10:28:29 AM
Don't know if you guys saw this video yet:

True value of Tesla?

http://www.autonews.com/article/20130515/VIDEO/305159998/first-shift-true-value-of-tesla&cciid=email-autonews-firstshift#axzz2TNoBs1Nm

Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on May 15, 2013, 12:29:57 PM
What an annoying voice :D
Title: Re: FIATY - Fiat S.p.A.
Post by: brker_guy on May 15, 2013, 02:29:33 PM


http://www.autonews.com/article/20130515/OEM/305159946/fiat-mulls-u-s-headquarters-after-chrysler-merger-report-says&cciid=email-autonews-daily#axzz2TNoBs1Nm
Title: Re: FIATY - Fiat S.p.A.
Post by: indirect on May 16, 2013, 01:34:31 PM
attached is the transcript. I was waiting for the owner of the transcript to ok the posting on the board
Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on May 16, 2013, 04:57:14 PM
attached is the transcript. I was waiting for the owner of the transcript to ok the posting on the board

Thank you very much, sir
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on May 16, 2013, 11:52:46 PM
http://www.bloomberg.com/news/2013-05-17/europe-car-sales-post-first-gain-in-19-months-on-germany.html
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on May 19, 2013, 09:25:36 PM
http://www.autonews.com/apps/pbcs.dll/article?AID=/20130520/OEM/305209957/chrysler-exec-our-vehicle-quality-rivals-toyotas#axzz2TnsjrbQ5
Title: Re: FIATY - Fiat S.p.A.
Post by: merkhet on May 20, 2013, 04:07:34 PM
I did a little bit of research on the VEBA issue, and it seems pretty cut and dry to me.  (Bold, italics and underlines for the parts that I found instructive.)

(1) The Call Option Agreement states:

Section 2.1 Grant and Payment. (a) The VEBA hereby grants to Fiat or any of Fiat’s designated subsidiaries or permitted assigns (such optionee, the “Holder”) the right and the option (the “Call Option”) to purchase the Covered Interests, subject to the terms and conditions set forth below. The price payable by the Holder to the VEBA or the relevant VEBA Holdco, as applicable, to acquire the Covered Interests to be acquired upon any exercise of the Call Option shall be (x) in the event that an IPO has not occurred, equal to, for each one percent (1%) of the outstanding Company LLC Interests acquired (calculated on a fully diluted basis but excluding any shares subject to any unexercised portion of the Incremental Equity Call Option), the Pre-IPO Call Option Exercise Price, or (y) in the event that an IPO has occurred (or will occur contemporaneously with the exercise of the Call Options), the Post-IPO Call Option Exercise Price for each share of Company common stock acquired.

(2) The following definitions are in the Call Option Agreement as the following:

Pre-IPO Call Option Exercise Price” means a price equal to one percent (1%) of the Company Equity Value.

Company Equity Value” means (a) the product of (i) the Market Multiple times (ii) the aggregate of the Company’s reported EBITDA for the most recent four financial quarters for which financial statements have been delivered or were required to be delivered by the Company to the qualifying members of the Company pursuant to Section 12.4(a) of the Operating LLC Agreement as of the time of determination, less (b) the Company’s Net Industrial Debt, as of the date of the Company’s consolidated financial statements that were most recently so delivered or required to be delivered.

Company” means New CarCo Acquisition LLC and its successors. -- (Note: Chrysler)

Market Multiple” means, for any Entity, the average EBITDA trading multiple for the Reference Automotive Manufacturers (determined by each Reference Automotive Manufacturer’s Market Enterprise Value, divided by such Reference Automotive Manufacturer’s EBITDA as reported for the four most recent fiscal quarters for which financial data has been reported); provided that in determining the Market Multiple, any of the Reference Automotive Manufacturers whose EBITDA trading multiple differs from the average of the other Reference Automotive Manufacturers by more than one standard deviation shall be excluded; and provided further that the Market Multiple shall not, in any event, exceed the Fiat Multiple.

Fiat Multiple” means, at any time, Fiat’s Market Enterprise Value, divided by Fiat’s EBITDA as reported for the four most recent fiscal quarters for which financial data has been reported.

(3) Just for completeness, I tracked down the definition of Reference Automotive Manufacturer to make sure there's no funny business there:

Reference Automotive Manufacturers” means General Motors Corporation, Ford Motor Company, Volkswagen AG, Daimler AG, BMW, Renault, Toyota Motor Corp., Honda Motor Corp., Nissan Motor Corp. and Peugeot; provided that the list of Reference Automotive Manufacturers will be updated annually to eliminate any Entities that are no longer operating independently or the shares of which are no longer traded on an internationally recognized securities exchange and to make such other changes as may be agreed between Fiat and the Company (acting at the direction of its independent directors).

----

Now, I haven't read the transcript yet -- that's for later tonight or tomorrow morning -- but as a former lawyer, it seems fairly clear cut that the agreement contemplates using Fiat's multiple as a cap to amount of Market Multiple to apply. One of the first things they teach us in Contract Law is that things that don't make it into the K (contract) don't matter -- meeting of the minds, etc. blah blah blah.

What's VEBA's play here -- wait to see if Chrysler's EBITDA goes way up?

(I've attached both documents for reference.)
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on May 20, 2013, 04:37:24 PM
Now, I haven't read the transcript yet -- that's for later tonight or tomorrow morning -- but as a former lawyer, it seems fairly clear cut that the agreement contemplates using Fiat's multiple as a cap to amount of Market Multiple to apply. One of the first things they teach us in Contract Law is that things that don't make it into the K (contract) don't matter -- meeting of the minds, etc. blah blah blah.

What's VEBA's play here -- wait to see if Chrysler's EBITDA goes way up?

(I've attached both documents for reference.)

You are going to have a wonderful time banging your head while reading the "debt for borrowed money" section.
Title: Re: FIATY - Fiat S.p.A.
Post by: merkhet on May 21, 2013, 09:10:45 AM
Read the transcript from Veba case ongoing. Fiat case seems strong.

I would have to disagree. It actually seems like the judge is more sympathetic to the VEBA's interpretation of the contract than Fiat's -- though I personally think that Fiat's interpretation is the correct one.

Can someone explain something to me?  I've already formed an opinion on it, but I'd like to get a little bit of feedback.

Fiat wants to buy all of Chrysler.  The call option only covers 40% of the VEBA's interest in Fiat.  The equity repurchase agreement indicates that the VEBA can only make $4.5 billion + 9% interest as a cap.  Regardless of what Fiat ends up paying for 40% of the VEBA's share, won't the VEBA just make up the rest for the remaining 60% of its share?  I don't see how Fiat avoids paying out the full $4.5 billion + 9% interest.

Thoughts?
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on May 22, 2013, 12:08:34 PM
Fiat Industrial Aims to Shift Tax Home to Britain


http://www.nytimes.com/aponline/2013/05/22/business/ap-eu-italy-fiat-industrial.html?src=busln&_r=0
Title: Re: FIATY - Fiat S.p.A.
Post by: merkhet on May 25, 2013, 06:20:43 PM
http://online.wsj.com/article/SB10001424127887323336104578503263073192662.html?mod=WSJ_hp_LEFTWhatsNewsCollection
Title: Re: FIATY - Fiat S.p.A.
Post by: brker_guy on May 25, 2013, 10:31:57 PM
Chrysler vs. Tesla:  Let the war of words begin...

http://www.autonews.com/article/20130524/VIDEO/305249976/autonews-now-chrysler-versus-tesla?cciid=email-autonews-annow&r=2994C8377578D8V#axzz2UNDaEaE0
Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on May 27, 2013, 02:46:16 PM
attached is the transcript. I was waiting for the owner of the transcript to ok the posting on the board

Thoughts after reading the document:
- The only way to compute the price in this contract is to follow the formula. Even if the formula were supposed to be a proxy of fair value it simply not relevant if it does or not. VEBA is not arguing that the price should represent fair value.
- The court will have to decide whether Fiat manipulated the formula to get a lower price outcome, by making selective adjustments to the numbers. The contract is flawed to the extent that is computation of the formula is vague/unclear on some points (f.e. the use minority interest) and flawed in other points (stating the use of GAAP numbers when Fiat reports with IFRS).
- The biggest issue is determining whether the VEBA Note is supposed to be used in the calculation of EV or not, as that is were the sensitivity to the outcome of the price is the most.

Gísli

Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on May 29, 2013, 01:43:50 PM
http://www.bloomberg.com/news/2013-05-29/fiat-said-to-ready-10-billion-in-financing-for-chrysler.html (http://www.bloomberg.com/news/2013-05-29/fiat-said-to-ready-10-billion-in-financing-for-chrysler.html)

Fiat SpA (F) is in talks for as much as $10 billion in financing from a pool of banks to buy the Chrysler Group LLC stake it doesn’t own and refinance the two automakers’ debt, people familiar with the matter said.

Title: Re: FIATY - Fiat S.p.A.
Post by: merkhet on May 29, 2013, 09:28:24 PM
http://www.bloomberg.com/news/2013-05-29/fiat-said-to-ready-10-billion-in-financing-for-chrysler.html (http://www.bloomberg.com/news/2013-05-29/fiat-said-to-ready-10-billion-in-financing-for-chrysler.html)

Fiat SpA (F) is in talks for as much as $10 billion in financing from a pool of banks to buy the Chrysler Group LLC stake it doesn’t own and refinance the two automakers’ debt, people familiar with the matter said.

Chief Executive Officer Sergio Marchionne aims to complete the purchase by the end of the summer, pending the results of a legal case between Fiat and the health-care trust over the value of its Chrysler stake, the people said.

...

The judge has until late July to make a ruling in the case, according the court’s guidelines, which stipulate a decision should come within 90 days of oral arguments.
Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on May 30, 2013, 03:39:00 AM
Asked if Fiat Chief Executive Sergio Marchionne will stay on after 2015, Elkann said he would.

"Marchionne has talked about 2015 as the date he would leave the group, because a lot of the things he is working on will be completed," Elkann said. "I have discussed this with him and am convinced that he will stay on with us for many more years."

http://www.reuters.com/article/2013/05/30/exor-fiatindustrial-idUSL5N0EB1LJ20130530?type=companyNews&feedType=RSS&feedName=companyNews&rpc=43
Title: Re: FIATY - Fiat S.p.A.
Post by: meiroy on May 30, 2013, 04:21:50 AM
Fiat Industrial Aims to Shift Tax Home to Britain


http://www.nytimes.com/aponline/2013/05/22/business/ap-eu-italy-fiat-industrial.html?src=busln&_r=0

http://www.reuters.com/article/2013/05/30/us-exor-fiatindustrial-idUSBRE94T0DH20130530?feedType=RSS&feedName=innovationNews&rpc=43
(Reuters) - Italian truck and tractor maker Fiat Industrial's (FI.MI) merger with its U.S. unit CNH (CNH.N) will take place between July 4 and September 1, the company's controlling shareholder said on Thursday.
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on June 02, 2013, 05:36:14 PM
(http://farm4.staticflickr.com/3807/8930816204_a5a365a39b.jpg)
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on June 03, 2013, 06:42:01 PM
Fiat-Chrysler HQ speculation largely irrelevant: Real power is already in Michigan.

http://www.detroitnews.com/article/20130603/AUTO0101/306030321#ixzz2VCvdXjNr
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on June 04, 2013, 10:58:27 AM
Chrysler rejects NHTSA's request for recall of 2.7 million Jeeps
Title: Re: FIATY - Fiat S.p.A.
Post by: hellsten on June 05, 2013, 06:52:29 AM
http://www.gwinvestors.com/Main/Blog/Entries/2013/6/3_Fiat_SpA_(F_IM)__Only_Second_Gear_files/2013.06.03%20Fiat%20Second%20Gear.pdf
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on June 07, 2013, 09:43:15 AM
Hi Guys,
    I am confused about the new Jeep Grand Cherokee's exterior. Google search shows that it looks like this:
http://www.jeep.com/en/2014/grand_cherokee/?sid=1037056&KWNM=jeep+grand+cherokee&KWID=3618348157&TR=1&channel=paidsearch#model=summit&color=deep_cherry_red
   
    But a few months ago I remember people complaining it looks very ugly, and I remember it like this:
   http://features.blogs.fortune.cnn.com/2013/04/02/does-jeep-have-a-design-problem/

    So what happened?
Title: Re: FIATY - Fiat S.p.A.
Post by: hyten1 on June 07, 2013, 09:48:07 AM
one is cherokee

the other is grand cherokee

2 different model
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on June 07, 2013, 11:34:37 AM
one is cherokee

the other is grand cherokee

2 different model

Oh..... The new 2014 Cherokee looks a bit controversial..... Do you like the exterior?
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on June 07, 2013, 12:23:56 PM
But a few months ago I remember people complaining it looks very ugly, and I remember it like this:
   http://features.blogs.fortune.cnn.com/2013/04/02/does-jeep-have-a-design-problem/

Is Cherokee the global Jeep?
http://www.autonews.com/apps/pbcs.dll/article?AID=/20130429/OEM03/304299995/is-cherokee-the-global-jeep#axzz2VYmBOg00
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on June 07, 2013, 12:31:23 PM
Fiat won't take on new debt to buy Chrysler stake - CEO

http://www.4-traders.com/FIAT-SPA-69342/news/Fiat-SpA-Fiat-won-t-take-on-new-debt-to-buy-Chrysler-stake-CEO-17010021/
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on June 07, 2013, 02:23:28 PM
Chrysler 300 SRT8

http://www.autonews.com/apps/pbcs.dll/article?AID=/20130324/RETAIL01/303249989/for-chrysler-300-srt8-key-to-luxury-inroads-fatter-margins#axzz2VYmBOg00

http://www.nytimes.com/2013/03/17/automobiles/autoreviews/a-chase-car-to-lure-private-eyes-out-of-retirement.html?_r=1&
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on June 08, 2013, 08:40:14 AM
http://www.bloomberg.com/news/2013-06-08/marchionne-says-fiat-may-acquire-chrysler-stake-just-before-ipo.html (http://www.bloomberg.com/news/2013-06-08/marchionne-says-fiat-may-acquire-chrysler-stake-just-before-ipo.html)


Marchionne Says Fiat May Acquire Chrysler Stake Just Before IPO
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on June 12, 2013, 02:05:33 PM
Ferrari repositions for a one-horse race in ultra-luxury stakes. > while helping Maserati versus Porsche, and Alfa versus Audi

http://www.ft.com/intl/cms/s/0/d700b4be-d0f0-11e2-a3ea-00144feab7de.html#slide0
Title: Re: FIATY - Fiat S.p.A.
Post by: PLynchJr on June 13, 2013, 10:00:28 AM
Dodge brand possibly on the way out?

http://www.autoblog.com/2013/06/13/does-the-future-of-fiat-chrysler-include-dodge/
Title: Re: FIATY - Fiat S.p.A.
Post by: vpagano on June 14, 2013, 07:36:53 AM
FIAT looking to refinance the merged Fiat-Chrysler, $5.5 Billion of total re-financing.

http://www.bloomberg.com/news/2013-06-13/fiat-said-set-to-reach-2-6-billion-refinancing-deal.html
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on June 14, 2013, 11:38:34 AM
4C Top Gear
http://www.readability.com/articles/tuqocdrh

4C in Madrid.
http://www.youtube.com/watch?v=FnTYp2B0ZDM

4C into production.
http://www.digitaltrends.com/cars/alfa-romeo-4c-compact-supercar-goes-into-production-at-maserati-plant/
http://www.motorauthority.com/news/1084744_alfa-romeo-shares-its-4c-production-secrets

Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on June 15, 2013, 08:55:44 AM
4C Top Gear
http://www.readability.com/articles/tuqocdrh

4C in Madrid.
http://www.youtube.com/watch?v=FnTYp2B0ZDM

4C into production.
http://www.digitaltrends.com/cars/alfa-romeo-4c-compact-supercar-goes-into-production-at-maserati-plant/
http://www.motorauthority.com/news/1084744_alfa-romeo-shares-its-4c-production-secrets

So 4C's curb weight/hp ratio is 1980/245 = 8, while Porche Cayman's ratio is about 10. I think 4C is the definite winner here.
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on June 15, 2013, 05:36:30 PM
Understanding Alfa Romeo … bad cars can be brilliant.

http://www.topgear.com/uk/videos/alfa-in-drag
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on June 15, 2013, 07:50:44 PM
Understanding Alfa Romeo … bad cars can be brilliant.

http://www.topgear.com/uk/videos/alfa-in-drag

This car looks quite ugly...
I think the 4C looks much better. :)
Does this video say that Alfa is a culture brand and the brand itself is worth a lot?
Title: Re: FIATY - Fiat S.p.A.
Post by: brker_guy on June 15, 2013, 11:39:22 PM
"bad cars can be brilliant."

Brilliant!!!  Bloody brilliant!!!  :D ;D
Title: Re: FIATY - Fiat S.p.A.
Post by: paologorgo on June 15, 2013, 11:51:40 PM
sorry for the OT, I thought someone might enjoy a few pictures of the Ferrari factory:

http://erly.com/user/paologorgo/ferrari-familyday2013-
Title: Re: FIATY - Fiat S.p.A.
Post by: meiroy on June 17, 2013, 07:32:23 AM

Fiat Said to Get $2.7 Billion Refinancing Before Chrysler Deal
http://www.bloomberg.com/news/2013-06-17/fiat-said-to-get-2-7-billion-refinancing-before-chrysler-deal.html?cmpid=yhoo

"Fiat SpA (F), Italy’s biggest manufacturer, will raise a 2 billion-euro ($2.7 billion) loan ahead of its planned merger with Chrysler Group LLC, according to two people with knowledge of the matter....

The debt, which includes two one-year extension options, replaces a 1.95 billion-euro credit facility due July next year and will be offered to a wider group of lenders later this month, the people said.

The Italian automaker may raise as much as $10 billion from banks to increase its stake in Chrysler and to refinance both companies’ debt, people familiar with the matter said last month. The Turin-based company has built up a 58.5 percent stake in Chrysler, and is in talks to buy the remainder owned by the United Auto Workers’ retiree health-care trust, Chief Executive Officer Sergio Marchionne has said."
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on June 18, 2013, 01:19:22 PM
Chrysler Will Recall Jeeps http://online.wsj.com/article/SB10001424127887324021104578553320397526726.html
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on June 21, 2013, 02:36:48 AM
Quote
(BN) Fiat Judge Seen Leaving Marchionne in Lurch Over Chrysler (
1)

+------------------------------------------------------------------------------+

Fiat Judge Seen Leaving Marchionne in Lurch Over Chrysler (1)
2013-06-20 07:29:07.813 GMT


     (Updates with today’s share trading in seventh paragraph.)

By Jef Feeley, Phil Milford and Tommaso Ebhardt
     June 20 (Bloomberg) -- Fiat SpA’s Sergio Marchionne may
have to wait months longer than planned to learn the price of
shares he needs to complete his purchase of Chrysler Group LLC.
     Fiat, the Turin, Italy-based automaker, asked Delaware
Chancery Court Judge Donald Parsons, 64, last year to rule that
a call-option agreement covering some shares held by a United
Auto Workers’ retiree health-care trust are worth $139.7
million. The trust puts the value as high as $342 million.
     Parsons, who is considering the matter based on pretrial
filings by the two sides, is likely to call for a trial, where
witnesses and experts can be questioned and cross-examined,
before placing a value on the shares, said Charles Elson,
director of the John L. Weinberg Center for Corporate Governance
at the University of Delaware. That would add months to a
process Marchionne had estimated would be completed by the end
of September.
     The judge would “want to take the time to get all the
information” in a trial, Elson said in an interview.  “He’s a
very careful judge.”
     A decision, either valuing the shares or forcing a trial,
could come as soon as next month, although there’s no solid
deadline.
     Marchionne, chief executive officer of both Fiat and Auburn
Hills, Michigan-based Chrysler, said this month that he expected
a ruling on the option value by the “third quarter at the
latest.” A Fiat representative declined to comment further on
the chancery proceeding beyond Marchionne’s statement about the
timing.

                           Shares Fall

     Fiat dropped as much as 11 cents, or 2 percent, to 5.43
euros and traded down 1.2 percent as of 9:26 a.m. in Milan. The
stock has gained 45 percent this year, valuing the Italian
automaker at 6.85 billion euros ($9.1 billion).
     A decision by Parsons that the valuation dispute must go to
trial may push back a final ruling on the stock’s value for as
long as a year, said Larry Hamermesh, a Widener University
professor who specializes in Delaware corporate law.
     “Since the parties still have to depose witnesses and get
ready for trial, it would be incredibly fast to get that all
done in six months. I’d say nine to 12 months is more
realistic,” the Delaware-based professor said. A trial “is the
most likely scenario,” he said.
     
Marchionne, 61, has spent the past four years working to
unify the companies so they can better compete with Toyota Motor
Corp., General Motors Co. and Volkswagen AG. He has said the
push to acquire the UAW trust’s shares is part of the
unification effort.

                           ‘Not Good’

     “Uncertainty over Chrysler is not good,” said Philippe
Houchois, an automotive analyst with UBS AG in London. “It’s
not good for a company to have shareholders arguing, and
Marchionne is very aware of those things.” Houchois said he
thinks a deal can still be reached by the end of the year. Fiat
may pay as much as $4.5 billion for the entire 41.5 percent
holding, UBS estimates.
     Chrysler has become Fiat’s reliable profit generator as the
Italian company struggles to end losses in Europe, which totaled
704 million euros last year.
     Marchionne has been counting on Chrysler and its 38
straight monthly U.S. sales gains to offset losses at Fiat’s
mass-market brands in Europe. Chrysler’s share of the U.S.
market has risen for three straight years, reaching 11.4 percent
in 2012, according to researcher Autodata Corp. Chrysler’s 2012
sales in its home market climbed 21 percent to 1.65 million
vehicles.
     Chrysler reported first-quarter net income of $166 million
and maintained its forecast for full-year revenue of $72 billion
to $75 billion and net income of about $2.2 billion.

                           $10 Billion

     Fiat may raise as much as $10 billion from banks to
increase its stake in Chrysler and to refinance both companies’
debt, people familiar with the matter said in May. As part of
those talks, Marchionne may refinance $5.65 billion in loans for
Fiat and Chrysler as soon as tomorrow, people familiar with the
matter said last week.
     Marchionne, who wants to merge the two carmakers “as soon
as possible,” must first buy the remaining 41.5 percent in
Chrysler from the union’s trust. Fiat already owns 58.5 percent.
Marchionne said this month that talks with the fund are
“fundamentally” about price. He aims to buy the holding by the
end of the summer, the people said last month.
     Marchionne said this month that Fiat was in talks with the
union about buying its stake and is seeking to complete a deal
before a potential Chrysler initial public offering requested by
the union is held.

                      Interpreting Formulas

     The judge was asked to interpret the call-option
agreement’s formulas for valuing the first block of the UAW
trust’s stock up for sale, comprising more than 54,000 shares.
     The agreement covers more than 270,000 shares in all, about
17 percent of the trust’s stake. Fiat Chairman John Elkann has
said they are looking to Parsons to provide a benchmark. The
trust’s entire Chrysler stake totals 670,000 shares.
     The UAW trust’s lawyers argue the valuation formulas aren’t
clear and need interpretation. The union’s calculations put the
block of more than 54,000 shares at as much as $342 million,
more than twice Fiat’s estimate.
     Fiat acquired a stake in Chrysler in June 2009 after the
U.S. carmaker sought bankruptcy protection from creditors and
accepted more than $8 billion in financing help from the U.S.
and Canadian governments.
     As part of Chrysler’s Chapter 11 reorganization, the union
health-care trust wound up with the Chrysler stake and
promissory notes in exchange for wiping out retiree claims
against the carmaker in the bankruptcy case.

                         Health Provider

     The UAW’s Retiree Medical Benefits Trust provides health-
care services to more than 800,000 retired workers from
Chrysler, GM and Ford Motor Co. and their dependents, according
to the trust’s website. It’s the largest nongovernmental
purchaser of retiree health services in the U.S.
     Fiat sued the UAW trust last year, alleging union officials
reneged on promises to let the carmaker buy shares subject to
the agreement at a value set by the accord. The agreement gives
Fiat the right to purchase a portion of the trust’s shares every
six months through June 2016.
     The case turns on the agreement’s methods for assessing the
shares’ value. The valuation formulas are based, in part, on
Chrysler’s reported earnings before interest, taxes,
depreciation and amortization for the four most recent financial
quarters, minus the carmaker’s “net industrial debt” as listed
on its most recent financial statement, according to court
filings.

                        ‘Borrowed Money’

     The UAW argued in court papers that Fiat shouldn’t include
the promissory notes from the bankruptcy case in Chrysler’s debt
calculations. The notes don’t meet the call-option agreement’s
definition of “borrowed money” and improperly lowered the
carmaker’s value, the UAW contended. That adversely affected the
value of the trust’s shares, the union said.
     Fiat said the notes met the definition of borrowed funds
and were properly included in the debt calculations.
     At a hearing in April, Parsons said he was “kind of
leaning” toward the union’s position on the debt calculations
while indicating he wasn’t swayed by the UAW’s arguments that
the shares should be sold at current fair-market value,
according to court filings.
     Parsons considered requests by Fiat and the union for
judgments “on the pleadings” for different questions in the
case during the April hearing. Such motions are made in hope of
winning a case without suffering the time and expense of a
trial.

                        Agreement’s Terms

     Parsons could agree with Fiat’s position that the option
agreement’s terms are unambiguous and rule the block of 54,000
shares is worth $139.7 million, said Randall Thomas, a
Vanderbilt University professor of law and business who follows
Delaware corporate cases.
     “Chancery court judges do decide cases on motions for
judgment,” Thomas said in an interview.
     If Parsons opts for a trial, he could put the case on track
for expedited discovery, accelerating the exchange of evidence
between the parties, which means it could be ready for a full
hearing within two to three months, Thomas added.
     Elson, of the University of Delaware, doesn’t anticipate
that happening. Given the complexities of the valuation case and
the fact that “there’s a lot of money involved,” Elson said he
didn’t expect Parsons to decide at the pretrial stage.
    “It’s a very complex case,” Elson said. “These kinds of
cases take time.”
     The case is Fiat North America LLC v. UAW Retiree Medical
Benefits Trust, CA No. 7903, Delaware Chancery Court
(Wilmington).
Title: Re: FIATY - Fiat S.p.A.
Post by: LC on June 21, 2013, 07:51:33 AM
The judge really seemed to be out of his comfort zone when trying to interpret what various financial terms were. UAW is playing hardball...prolonging this as long as possible so hopefully the price of the comparable firms will increase, thus increasing the price of Chrysler.
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on June 24, 2013, 03:19:45 PM
Fiat is getting its own factory reps for dealers
http://www.autonews.com/article/20130624/RETAIL07/306249996#ixzz2XAtIxJbF

500 too small? Larger 500L to the rescue
http://www.autonews.com/article/20130617/OEM03/306179984#ixzz2XAuKLutC
Title: Re: FIATY - Fiat S.p.A.
Post by: valueInv on June 24, 2013, 09:00:37 PM
Quote
(BN) Fiat Judge Seen Leaving Marchionne in Lurch Over Chrysler (
1)

+------------------------------------------------------------------------------+

Fiat Judge Seen Leaving Marchionne in Lurch Over Chrysler (1)
2013-06-20 07:29:07.813 GMT


     (Updates with today’s share trading in seventh paragraph.)

By Jef Feeley, Phil Milford and Tommaso Ebhardt
     June 20 (Bloomberg) -- Fiat SpA’s Sergio Marchionne may
have to wait months longer than planned to learn the price of
shares he needs to complete his purchase of Chrysler Group LLC.
     Fiat, the Turin, Italy-based automaker, asked Delaware
Chancery Court Judge Donald Parsons, 64, last year to rule that
a call-option agreement covering some shares held by a United
Auto Workers’ retiree health-care trust are worth $139.7
million. The trust puts the value as high as $342 million.
   

So what happens in the scenario where the Judge values the options at $342 M? How does this effect the ability of Fiat to buy the remaining (non option) stake? How does it effect the price of that stake?
Title: Re: FIATY - Fiat S.p.A.
Post by: vpagano on June 25, 2013, 06:33:52 AM
Electric Fiat 500e sold out in California:

http://wardsauto.com/north-america/fiat-500e-sold-out
Title: Re: FIATY - Fiat S.p.A.
Post by: jch548 on June 25, 2013, 07:08:55 AM
Been reading things haven't been getting any better in Europe. Alix Partners estimates 58 of the largest auto-assembly plants in Europe are operating below 75% capacity vs 39 last year.
The article stated Fiat's Mirafiori plant was only operating at 16% capacity and was the least utilized plant.
Title: Re: FIATY - Fiat S.p.A.
Post by: jch548 on June 25, 2013, 07:24:31 AM
Dated but relevant article......


Reconstruction works at Fiat Mirafiori plant can finally start.

23 March 2012 12:09   No comments


Mirafiori Reconstruction works at Fiat Mirafiori plant can finally start.

The Mirafiori plant near Turin, historically one of Fiat’s most import production sites, is ready for the long awaited reconstructions. This means employees who have spent most of their time at home last year, now can look  forward to a more productive and certain future. Recently the Italian labour unions Fim, Uilm, Fismc, Ugl Mettalmeccanici di Torino and the Associazione Quadri all signed an agreement basically implementing the Pomigliano d’ Arco ‘World Class Manufacturing’ procedure: last year Fiat already signed a new national agreement for a restructured Pomigliano d’Arco production schedule, replacing the turbulent ‘Fabbrica Italia’ plans. Mirafiori is Europe’s largest car plant, but only managed a maximum car production of 300 per day in 2011. An all-time record low.

The Italians initially didn’t have any hopes for a turn-around. Back in 2010 there were already downsizing plans for Mirafiori but one of the more tougher and bigger unions (CGIL-Fiom) showed a lot of resistance. Recently they indicated, yet again, not to sign the new industrial plans. It now seems times are changing in Italy, and they have to.  Greater economic problems that suffocate the entire country are having its effects on the traditionally stubborn unions. Although these might be the first fruitful steps towards a more cost-efficient Italian production, Sergio Marchionne in his role of ACEA chairman, commented in Belgium that European car manufacturers still have to make more sacrifices in terms of cutting production. This would inevitably mean a stagnating period followed by a more flourishing one in which the EU will be more competitive in terms of (over)capacity.

Mirafiori 1 Reconstruction works at Fiat Mirafiori plant can finally start.

Going back to the situation in Italy, Marchionne knows what he’s talking about as the Termini Imerese plant closed last year (goes to Italian manufacturer DR) and several financial measures have already been taken. Fiat’s ‘cut’ and open policy therefore is an example for other EU car companies. According to Marchionne this is especially the case for the French and (partly) German car industry. The global economic downfall now also has its effect on China, the second largest economy in the world where industrial production has fallen to a four-month low and weakening domestic demand will surely result in more efficiency and flexibility. FGA demonstrates they’re not in a denial stage.

In the near future Mirafiori will be ready for a larger production than currently is the case. About 5,300 employees will gradually return to the factory. By September 2013, Mirafiori can concentrate on the production of two entirely new cars: a compact Jeep SUV and a Fiat SUV (500X). At the moment production of the Alfa Romeo MiTo and Lancia Musa still continuous but Fiat won’t say for how long. A new compact Alfa Romeo will propbably make its way to Mirafiori, but that will have to wait for another year.
Title: Re: FIATY - Fiat S.p.A.
Post by: jay21 on June 27, 2013, 01:06:28 PM
The One U.S. Automaker Still Stuck in Neutral

http://finance.yahoo.com/blogs/the-exchange/one-u-automaker-still-stuck-neutral-171449249.html

I am long this as of a week ago.
Title: Re: FIATY - Fiat S.p.A.
Post by: txlaw on June 27, 2013, 07:05:25 PM
Ferrari-Fueled Maserati at $65,600 Lures Bored BMW Buyers

http://www.bloomberg.com/news/2013-06-27/ferrari-fueled-maserati-at-65-600-lures-bored-bmw-buyers.html

Gotta say, though, I do not understand why they picked the name Ghibli.  Every time I read it, I think of the Japanese animation studio, which has a weird creature as its mascot: https://en.wikipedia.org/wiki/Studio_Ghibli
Title: Re: FIATY - Fiat S.p.A.
Post by: vpagano on June 27, 2013, 08:57:30 PM
A solid review below, I know in my area the Porsche Panamera sold like crazy as an alternative to the classic BMW or Mercedes. This will have the same effect...."entry-level" Italian!

http://www.autoblog.com/2013/06/26/2014-maserati-ghibli-review-first-drive/

By the way Ghibli is a classic name, the original was popular and I believe I read it outsold Ferrari and Lamborghini.
Title: Re: FIATY - Fiat S.p.A.
Post by: ERICOPOLY on June 27, 2013, 11:05:44 PM
Ferrari-Fueled Maserati at $65,600 Lures Bored BMW Buyers

http://www.bloomberg.com/news/2013-06-27/ferrari-fueled-maserati-at-65-600-lures-bored-bmw-buyers.html

Gotta say, though, I do not understand why they picked the name Ghibli.  Every time I read it, I think of the Japanese animation studio, which has a weird creature as its mascot: https://en.wikipedia.org/wiki/Studio_Ghibli

Funny, Ghibli is a scirocco, a VW car.
Title: Re: FIATY - Fiat S.p.A.
Post by: vpagano on June 28, 2013, 08:19:45 AM
Fiat ready to exercise option for another 3.3% of Chrysler:

http://www.reuters.com/article/2013/06/27/fiat-chrysler-option-idUSL5N0F33BW20130627
Title: Re: FIATY - Fiat S.p.A.
Post by: Philip Morris IV on June 28, 2013, 05:27:08 PM
There have been two Ghiblis actually.  As far as I know, the Ghibli II ('92-'97) was never offered in North America.  Very rare to find one here.  It looks like a Volvo 440 but the engine was highly unique: a tiny 2.0L V6, but fitted with twin-turbochargers.  Basically had the power of a V8 with half the volume/mass.

At first glance the Ghibli III looks exciting.  That biturbo V6 is a very promising engine, and the design is slick inside and out.
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on June 29, 2013, 08:14:09 PM
Maserati names first SUV Levante at the Paris auto show
http://www.autoweek.com/article/20120927/PARIS/120929835

At peak capacity, Maserati plans to build 20,000 to 25,000 units a year of the Levante, about 20,000 units of the Ghibli and 12,000 Quattroportes. The company's GranTurismo coupe and the GranCabrio convertible, which are made at Maserati's home plant in Modena, Italy, round out the range.

I think this was mentioned before, but the Levante will be made in Italy not Jefferson that is at full capacity.
http://www.readability.com/articles/otpgnuft

Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on June 29, 2013, 10:45:01 PM
Ghibli reviews.

http://www.automobilemag.com/reviews/driven/1306_2014_maserati_ghibli/
http://www.topgear.com/uk/car-news/maserati-ghibli-first-drive-2013-06-27
http://www.caranddriver.com/reviews/2014-maserati-ghibli-first-drive-review
http://www.telegraph.co.uk/motoring/car-manufacturers/maserati/10146075/Maserati-Ghibli-review.html
http://www.edmunds.com/maserati/ghibli/2014/road-test.html
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on July 01, 2013, 07:11:18 AM
Nice, so far so good
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on July 01, 2013, 08:18:34 PM
Why Fiat must race to launch Jeep output in China > Jeep, what a brand

http://europe.autonews.com/article/20130701/BLOG15/306289990/why-fiat-must-race-to-launch-jeep-output-in-china#axzz2XqyqoKVP
Title: Re: FIATY - Fiat S.p.A.
Post by: hellsten on July 02, 2013, 06:09:51 AM
Quote
Chrysler Group LLC, the third-largest U.S. automaker, extended its streak of U.S. sales gains in June and predicted demand in its largest market will keep growing even if accommodative monetary policy is scaled back.

Chrysler’s U.S. sales have gained for 39 consecutive months, boosting an auto market that’s on pace for its best year since 2007 as Americans replace the oldest vehicles ever on U.S. roads. Pent-up demand, attractive financing offers and an improving economy will keep propelling industry sales as the Federal Reserve winds down its unprecedented easing programs, said Reid Bigland, Chrysler’s U.S. sales chief.

http://www.bloomberg.com/news/2013-07-02/chrysler-extends-streak-of-monthly-u-s-sales-gains.html
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on July 02, 2013, 09:14:57 AM
is it too late to get on the FIAT train (or car)?
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on July 02, 2013, 01:12:17 PM
For me FV > 10 so dunno?
Title: Re: FIATY - Fiat S.p.A.
Post by: Packer16 on July 02, 2013, 04:16:48 PM
Fiat is still considerably cheaper on a CF basis than GM who is cheaper than the other automakers (except Renault and Pegeut which I would stay away from, because of the European exposure).  Fiat with Chrysler will sell about 50% in Us, 25% in Brazil and the rest in Europe.   Morningstar pegs FV at $19 so it has a good amount of upside and the NA market is finally at normalized levels but there are almost 12m units of pent-up demand so the momentum should last a few more years for all of thise in the NA market.

Packer
Title: Re: FIATY - Fiat S.p.A.
Post by: jch548 on July 02, 2013, 05:17:10 PM
WSJ today reported that auto registrations were down again yoy for June. France seemed the worst as I recall. Italy was down. Excluding corporate Spain was actually improving.

Europe is a mess. All the excess capacity and related price competition.

There was another story relating how U.S. auto manufacturers are very competitive as companies are producing here to export overseas.
Title: Re: FIATY - Fiat S.p.A.
Post by: txlaw on July 04, 2013, 07:23:45 AM
Jeep might be the most "patriotic" brand in the US:
http://www.usatoday.com/story/driveon/2013/07/01/most-patriotic-brands-jeep/2481337/
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on July 04, 2013, 09:42:38 AM
Worldwide clamor for Jeep, but most vehicles U.S.-made
http://www.toledoblade.com/Automotive/2012/11/04/Worldwide-clamor-for-Jeep-but-most-vehicles-U-S-made.html#4X5uJTAFJSOWDOJe.99
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on July 04, 2013, 03:26:02 PM
Fiat-Chrysler to build 280,000 Fiat and Jeep small SUVs in Italy
http://www.autonews.com/article/20130704/ANE/130709955#ixzz2Y7OHaN9b

Quote
Fiat and Jeep will join the hot small SUV segment, which is forecast to grow to 500,000 sales in Europe by 2015, up from 154,461 last year, according to consultancy IHS Automotive. In the first five months of this year, segment-leader Nissan sold 48,043 Jukes, up from 44,379 during the same period last year. Meanwhile the Opel/Vauxhall Mokka ranked second with sales of 32,342, according to market analysts JATO Dynamics.

Quote
Fiat intends to introduce 19 Italy-produced models through 2016, including nine Alfa Romeo-badged vehicles and six Maseratis. The carmaker plans to increase production of Fiat and Chrysler cars in Europe to 2 million cars a year by 2016 up from a planned 1.2 million this year.
Title: Re: FIATY - Fiat S.p.A.
Post by: Edward on July 06, 2013, 05:55:11 AM
Fiat is still considerably cheaper on a CF basis than GM who is cheaper than the other automakers (except Renault and Pegeut which I would stay away from, because of the European exposure).  Fiat with Chrysler will sell about 50% in Us, 25% in Brazil and the rest in Europe. 
There is a huge difference between Renault and Peugeot. Peugeot is doomed because it has most of its sales in Europe and also has a weak balance sheet.

Renault has a net cash position on the balance sheet, and holds a 43% stake in Nissan (also in a net cash position). This effectively means that combined with the pro rata sales of Nissan, Renault has less than 25% of its sales in Europe, about the same as your calculation for Fiat.

I like Renault-Nissan better because they are present in all the markets, not just US, EU and Brazil. They also have combined scale that is about twice Fiat-Chrysler which lets them invest in technology and compete better globally.
Title: Re: FIATY - Fiat S.p.A.
Post by: Packer16 on July 06, 2013, 06:19:06 AM
You are correct.  I read some the Renault thread and it does appear that Renault is in a good position much better than Peugeot.    However, via its use of debt, I think Fiat has more upside.  Given the maturity of the industry and the cost of borrowing, I think having some debt makes sense.  The CEO did a great job with the Nissan turnaround.  Do you know if Renault us planning on raising debt or at least having a cash neutral position? 

Packer
Title: Re: FIATY - Fiat S.p.A.
Post by: Edward on July 07, 2013, 01:09:51 AM
However, via its use of debt, I think Fiat has more upside.  Given the maturity of the industry and the cost of borrowing, I think having some debt makes sense. 
I will reiterate what Hugh Hendry once said about financial and operational leverage - When you have big operational leverage you can not entertain debt, because you will get wiped out in a recession. Autos have some serious operational leverage built in and I wouldn't want to have debt when the proverbial hits the fan (aka Peugeot). This is one reason I actually prefer Renault over Fiat, although I agree that the debt cost is low.

The way I think about it - if you want to lever up on debt, why not do it yourself to the level your'e comfortable with? Shorting treasuries is one way of doing that, options another.


Do you know if Renault us planning on raising debt or at least having a cash neutral position? 
Both Renault and Nissan intend to have a few B$ in net cash position. Renault probably could make due with 1-2B$, Nissan declared 3B$ net cash will do (they currently have 1B$).
Title: Re: FIATY - Fiat S.p.A.
Post by: plato1976 on July 07, 2013, 08:51:11 AM
fiat probably had no choice , but to carry some debt ;
the question is really when they are in better shape after the merge of fiat/chrysler, will they gradually deleverage ?
or it's their strategy to maintain a high debt level ?


However, via its use of debt, I think Fiat has more upside.  Given the maturity of the industry and the cost of borrowing, I think having some debt makes sense. 
I will reiterate what Hugh Hendry once said about financial and operational leverage - When you have big operational leverage you can not entertain debt, because you will get wiped out in a recession. Autos have some serious operational leverage built in and I wouldn't want to have debt when the proverbial hits the fan (aka Peugeot). This is one reason I actually prefer Renault over Fiat, although I agree that the debt cost is low.

The way I think about it - if you want to lever up on debt, why not do it yourself to the level your'e comfortable with? Shorting treasuries is one way of doing that, options another.


Do you know if Renault us planning on raising debt or at least having a cash neutral position? 
Both Renault and Nissan intend to have a few B$ in net cash position. Renault probably could make due with 1-2B$, Nissan declared 3B$ net cash will do (they currently have 1B$).
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on July 07, 2013, 03:49:45 PM
EVO on the Ghibli.
http://www.youtube.com/watch?feature=player_embedded&v=jlBFdR12vEY#at=516
http://www.evo.co.uk/carreviews/evocarreviews/290119/2013_maserati_ghibli_review.html

How does it compare?

The new Maserati Ghibli is an exciting new entrant to a very competitive class. It’s a stylish car and the new petrol engines suit it well. Being able to buy a diesel Maserati Ghibli is bound to help it gain sales in Europe, I just wish the engine was a more competitive unit, as it lacks the top-end spark found in the best sporting diesel engines like BMW’s turbo straight-sixes. Inside, the Ghibli feels very luxurious and from a class above cars like the Mercedes E-class and BMW 5-series.

Anything else I need to know?

The really good news is how aggressively priced the new Maserati Ghibli is. Prices start at £48,830 for the Ghibli Diesel, while the 325bhp Ghibli is the bargain of the bunch at £52,275. The UK range is topped off by the Ghibli S, which lists at £63,415. All cars come with a three-year, unlimited-mile warranty and deliveries in the UK start in October 2013.
Title: Re: FIATY - Fiat S.p.A.
Post by: vpagano on July 08, 2013, 05:58:23 AM
Fiat utilizing some production capabilities in Italy, producing vans w/ Peugeot

http://www.bloomberg.com/news/2013-07-05/fiat-said-to-agree-with-peugeot-on-investment-in-van-partnership.html
Title: Re: FIATY - Fiat S.p.A.
Post by: vpagano on July 08, 2013, 06:01:08 AM
Fiat exercises option for next 3.3% of Chrysler.

http://online.wsj.com/article/SB10001424127887323823004578593153471184048.html
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on July 09, 2013, 12:31:50 PM
Marchionne puts new model investments on hold in Italy after court ruling http://www.autonews.com/article/20130709/COPY01/307099946#ixzz2YZud5ybh
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on July 09, 2013, 06:24:58 PM
John Elkann: Fiat's fresh face
http://money.cnn.com/2013/07/08/news/companies/elkann-fiat-exor.pr.fortune/index.html

> relevant also for Exor.
Title: Re: FIATY - Fiat S.p.A.
Post by: brker_guy on July 11, 2013, 11:11:48 AM
It is nice designers have picked 3 of FIAT's cars on the best looking convertibles list:

http://autos.yahoo.com/news/top-designers-pick-10-best-convertible-designs-of-all-time-215426762.html?page=all
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on July 11, 2013, 11:00:58 PM
Thanks PM, that was an extremely interesting read!
Title: Re: FIATY - Fiat S.p.A.
Post by: Olmsted on July 13, 2013, 11:34:08 AM
Creative advertisement, to say the least:

http://www.autonews.com/article/20130712/RETAIL03/130719947/in-new-fiat-ad-the-car-is-alive

(http://www.autonews.com/apps/pbcsi.dll/storyimage/CA/20130712/RETAIL03/130719947/AR/0/AR-130719947.jpg&MaxW=622)
Title: Re: FIATY - Fiat S.p.A.
Post by: wellmont on July 13, 2013, 05:46:51 PM
the quiet smart guys are all invested here. I am going to have to coat tail. :)
Title: Re: FIATY - Fiat S.p.A.
Post by: Packer16 on July 13, 2013, 07:57:06 PM
Another European car maker with good international exposure and a cheap price is Renault.

Packer
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on July 13, 2013, 11:50:24 PM
Another European car maker with good international exposure and a cheap price is Renault.

Packer

Yep and Ghosn is good. You have to balance Nissan-Renault's larger scale, better balance sheet and country diversification, versus

* Ferrari brand is special.
* Option value of Maserati and Alfa
* Jeep global opportunity
* More exposure to US pent-up demand
* New US financing arm with Santander
* Option of buying VEBA's stake at a very cheap price
* Exor's capital allocation and support.

Both should do well and possibly Nissan-Renault has an even better downside protection. It's just that I like all these free options a lot.
Title: Re: FIATY - Fiat S.p.A.
Post by: vpagano on July 18, 2013, 06:47:03 AM
Fiat presence in India, looking to expand Jeep:

http://www.exchange4media.com/51981_jeep-from-fiat-chrysler-scouts-for-creative-partner.html

"We want to be a significant player in this market. We were a top player once, we want to get back. We want to double our market share, which is less than 1% as of now. We sell around 7,000 cars per annum, we are looking to double this number after opening 100 dealerships by the end of this year."

http://www.business-standard.com/article/companies/we-want-to-approach-our-old-customers-in-smaller-cities-fiat-113071800802_1.html
Title: Re: FIATY - Fiat S.p.A.
Post by: vpagano on July 18, 2013, 07:14:08 AM
Maserati looking to disrupt Mercedes and BMW, still 50,000 car target by 2015

http://www.theepochtimes.com/n3/185231-century-old-marque-to-lead-fiats-luxury-revival/
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on July 18, 2013, 11:52:52 AM
Fiat's Italian suppliers grab Chrysler lifeline > The Poltrona Frau story

http://europe.autonews.com/apps/pbcs.dll/article?AID=/20130718/ANE/130719859/fiats-italian-suppliers-grab-chrysler-lifeline#axzz2ZQKfqEeH
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on July 19, 2013, 08:01:35 PM
LED acceptance is vital to Marelli's U.S. growth  > Magneti Marelli's US plans
http://www.autonews.com/article/20130715/OEM10/307159943#ixzz2ZYDidTHt
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on July 22, 2013, 10:11:41 AM
Fiat-Chrysler mull rwd platform > more on Alfa plans.
http://www.autonews.com/article/20130722/COPY01/307229934#ixzz2ZnMvWBGu
Title: Re: FIATY - Fiat S.p.A.
Post by: merkhet on July 22, 2013, 03:41:28 PM
http://www.valuewalk.com/2013/07/chanos-shorts-caterpillar/

I could use some more cheap shares of Fiat...
Title: Re: FIATY - Fiat S.p.A.
Post by: Packer16 on July 22, 2013, 04:07:35 PM
Nice to know that Chanos and others are short and hedging with VW??  It makes me want to go out buy some more.

Packer
Title: Re: FIATY - Fiat S.p.A.
Post by: vpagano on July 22, 2013, 07:23:15 PM
Chanos has been wrong all along, saying Fiat would undergo a rather dilutive offering to acquire the rest of Chrysler. We know financing is in place when the time comes. He has been short so long, he must be getting killed on this trade. Is he waiting for a major pullback to proclaim himself "correct"? I don't understand why he would keep the trade on in the middle of an automotive sector recovery, as part of a pair trade or not.  I see it as good for us longs anyway!
Title: Re: FIATY - Fiat S.p.A.
Post by: krazeenyc on July 22, 2013, 07:27:56 PM
Chanos has been wrong all along, saying Fiat would undergo a rather dilutive offering to acquire the rest of Chrysler. We know financing is in place when the time comes. He has been short so long, he must be getting killed on this trade. Is he waiting for a major pullback to proclaim himself "correct"? I don't understand why he would keep the trade on in the middle of an automotive sector recovery, as part of a pair trade or not.  I see it as good for us longs anyway!

Isn't he long both VW and GM?
Title: Re: FIATY - Fiat S.p.A.
Post by: LC on July 22, 2013, 07:41:57 PM
His trade is prob short Fiat and long Chrysler comps. Reason being the price Fiat will have to pay for Chrysler is dependent on a WAVE multiple of Chrysler comps. And the judge pushed his decision back, thereby giving the comps more time to recover and push up the multiple.
Title: Re: FIATY - Fiat S.p.A.
Post by: vpagano on July 23, 2013, 06:41:30 AM
That's a reasonable strategy, however I think many of us would agree that Fiat could pay up higher than what they want and still could a good deal for Chrysler. The synergies and global powerhouse they will create will make it seem cheap in the long run.
Title: Re: FIATY - Fiat S.p.A.
Post by: vpagano on July 23, 2013, 09:10:01 AM
Fiat-Chrysler could be based in the Netherlands after merger.

 http://www.reuters.com/article/2013/07/23/us-fiat-headquarters-idUSBRE96M0KT20130723
Title: Re: FIATY - Fiat S.p.A.
Post by: vpagano on July 25, 2013, 10:19:36 AM
A little Fiat news out of the UK:

http://www.automotiveworld.com/news-releases/fiat-professional-delivers-strong-growth-in-first-six-months/

H1 sales figures up more than 50% YoY for Fiat Professional
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on July 25, 2013, 10:44:35 AM
Family Fiat for Thrifty Pope

Pope Francis Abandons Bulletproof Mercedes for Mass-Produced Motor.

http://online.wsj.com/article/SB10001424127887323610704578625623748779656.html (http://online.wsj.com/article/SB10001424127887323610704578625623748779656.html)

...
On his first trip to Latin America, history's first New World pope grabbed headlines with his decision to ditch the bulletproof Mercedes-Benz popemobile for a silver Fiat Idea for his inaugural drive around Rio de Janeiro.
...
Title: Re: FIATY - Fiat S.p.A.
Post by: compoundinglife on July 26, 2013, 11:27:42 AM
Interesting marketing from a Fiat dealer here in Seattle:

http://blog.uber.com/2013/07/26/free-rides-to-from-capitol-hill-block-party-brought-to-you-by-uber-fiat-of-kirkland/
Title: Re: FIATY - Fiat S.p.A.
Post by: LC on July 26, 2013, 11:44:11 AM
Interesting marketing from a Fiat dealer here in Seattle:

http://blog.uber.com/2013/07/26/free-rides-to-from-capitol-hill-block-party-brought-to-you-by-uber-fiat-of-kirkland/
The most satisfying part was in big bold font, "We are expecting very high demand, so keep trying if a car is not available right away."

I just want Fiat to put people in these cars and focus on brand awareness. The commercials are great, and I've actually seen Fiat's on the street. Good signs. Granted, the investment thesis is predicated on the market re-evaluating post the Chrysler merger, but everything else is just gravy. And I like gravy!  ;D
Title: Re: FIATY - Fiat S.p.A.
Post by: vpagano on July 30, 2013, 02:19:48 AM
Chrysler Q2 earnings are out:

http://www.prnewswire.com/news-releases/chrysler-group-reports-second-quarter-net-income-of-507-million-217553591.html
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on July 30, 2013, 09:29:36 AM
http://online.wsj.com/article/SB10001424127887323854904578637481905261070.html?mod=WSJ_business_whatsNews (http://online.wsj.com/article/SB10001424127887323854904578637481905261070.html?mod=WSJ_business_whatsNews)

Fiat Profit Lifted by Chrysler
Italian Auto Maker Would Have Suffered Loss Without Chrysler Contribution.

Net profit rose to €142 million ($188.3 million) from €32 million a year earlier, which was restated for accounting reasons. Without the contribution from Chrysler, which reported earnings earlier in the day, Fiat would have suffered a net loss of €247 million.

Fiat's second-quarter trading profit—earnings before interest, taxes and one-off items, a key figure watched by analysts—was €1.03 billion, up from a restated €947 million a year earlier. The figure was slightly higher than the €1.01 billion expected by analysts. Fiat said losses in Europe narrowed because it kept costs under control and improved its product mix with the success of the Fiat 500L, the latest addition to the 500 product range.

Revenue totaled €22.33 billion, up from €21.52 billion.

Title: Re: FIATY - Fiat S.p.A.
Post by: jch548 on July 31, 2013, 09:33:02 AM
Fiat SpA : U.S. ruling may step up Fiat's Chrysler buyout settlement


07/31/2013 | 10:51am US/Eastern

 
Fiat may step up efforts to negotiate a full buyout of majority-owned Chrysler out of court, sources said, after a Delaware judge prolonged the Italian carmaker's legal tussle with a minority shareholder, the UAW union healthcare trust.

Fiat said it "looked forward" to solving a dispute with the trust in court after winning a partial victory on Tuesday in its bid to buy the 41.5 percent of Chrysler it does not own from VEBA, the United Autoworkers-affiliated healthcare trust.

Delaware Chancery Court Judge Donald Parsons accepted the carmaker's legal positions in two pivotal disputes with VEBA. But he stopped short of ordering VEBA to sell 54,154 Chrysler shares to Fiat for $139.7 million, as the latter had sought, saying certain questions still needed to be answered through testimony at a trial.

The ruling will trim an estimated $500 million from the price tag for Fiat to buy out the VEBA trust, investment bank UBS said on Wednesday, cutting its estimate of the value of VEBA's 41.5 percent stake to $4.0 billion from $4.5 billion.

"We view the ruling as positive for Fiat and likely to help an out-of-court agreement," said UBS analyst Philippe Houchois in a research note. "We still view end 2013 as a likely deadline for an agreement as VEBA."

The ruling forces the two parties to step up talks if they want to come to a deal quickly, people familiar with the matter said. But the lower price Fiat is likely to pay for the disputed part of the stake may make VEBA a tougher bargaining partner, one of them noted.

The UAW became Chrysler's second-largest shareholder when Chrysler emerged from bankruptcy in 2009 and the union swapped future healthcare payments owed to it for a stake. The VEBA trust manages those healthcare benefits on behalf of the union.

Fiat runs the two automakers as a single company, but wants to buy the rest of Chrysler to squeeze out more synergies, cut borrowing costs and access some of Chrysler's cash flow.

TIMELINE UNCLEAR

While the price tag for Fiat may now fall, the timeline for the deal remains blurred.

"Fiat looks forward to resolving the few remaining issues in the litigation, through the discovery requested by the judge, and remains confident that those residual issues will also be resolved in its favour," Fiat said in a statement on Wednesday.

Any trial is likely to take between a year and 18 months, said a person familiar with the matter. But the judge's ruling offered Fiat no indication of when it would start.

Fiat's lawyers will now be forced to argue in court with representatives of the healthcare trust about why Fiat should pay less than the trust is asking in a deal the latter needs to pay future benefits for retired Chrysler workers.

Fiat shares were volatile, rising 0.25 percent to 6.05 euros at 1429 GMT.

"The ruling is a step forward and is good news," said a Milan trader. "But it's not decisive and the market is not discounting it as a done deal yet."

(Reporting by Jennifer Clark and Stephen Jewkes; editing by James Jukwey and David Evans)
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on July 31, 2013, 04:12:24 PM
http://www.businessweek.com/articles/2013-07-31/american-automobile-glut-unsold-cars-are-piling-up#r=rss (http://www.businessweek.com/articles/2013-07-31/american-automobile-glut-unsold-cars-are-piling-up#r=rss)

American Automobile Glut? Unsold Cars Are Piling Up
Title: Re: FIATY - Fiat S.p.A.
Post by: hellsten on August 02, 2013, 10:26:59 AM
Greenwood Investors on Fiat:

Quote
Fiat SpA (F IM) represents a rare investment opportunity- one of the few outliers that an investor gets in his career. 

In a nutshell, it essentially has about 5x the upside that highly-favored GM has, with less downside risk. 

How could this be, since Fiat has industrial net debt as opposed to GM’s industrial net cash position? 

The Agnelli Family and venerable CEO Sergio Marchionne (history of turning around SGS SA, Fiat Industrial, Fiat in 2004, and of course Chrysler)
have purposefully kept Fiat’s debt structure totally unsecured, with the ability to sell or distribute assets freely.

As long as such a scenario doesn’t prevent Maserati and Alfa Romeo resurgences ex-Europe, we still think Fiat is sustainable as a stand-alone entity, as these brands will add more than €1.5 billion to Fiat’s stand-alone operating profit after rolling out key products from today through 2015.

Mark-to-market risk is the main problem here, and is more heightened than an investment in Ford’s or GM’s stocks.

A combined Fiat-Chrysler, even in the current European economic climate, is worth €12.72-€29.04 per share, using comparable Ford & GM multiples on EBIT and EBITDA.  That’s assuming the maximum Chrysler take-out price as stipulated in the equity recapture agreement.

Alfa Romeo’s relaunch and further product additions and efficiencies make 2014 even more of an exciting year for Fiat’s bottom line.  So the “quick double” that Fiat’s shareholders have after a Chrysler merger can easily turn into a 3 or 4-bagger as these increases in operating income and EBITDA have an outsized effect on the debt & pension-adjusted equity value. 

market participants will continue to hold Fiat in a penalty box and give the stock a discount until European economies recover (Fiat’s European sales in July will likely show year on year growth), but a comparable fair value of €24.21 gives the current investor a large margin for error since the stock last traded at €6.11.
http://www.gwinvestors.com/Main/Blog/Entries/2013/8/1_Exor_SpA_%28EXO_IM%29__The_Italians_Are_Coming.html
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on August 02, 2013, 01:39:19 PM
Greenwood Investors on Fiat:

Quote
have purposefully kept Fiat’s debt structure totally unsecured, with the ability to sell or distribute assets freely.
http://www.gwinvestors.com/Main/Blog/Entries/2013/8/1_Exor_SpA_%28EXO_IM%29__The_Italians_Are_Coming.html

I don't get this part. If they sell assets and then go into bankruptcy in a nightmare scenario, won't they be sued for fraudulent conveyance?
Title: Re: FIATY - Fiat S.p.A.
Post by: Packer16 on August 02, 2013, 01:44:40 PM
If the debtholders have a security in the assets & Fiat runs into issues they need to get their approval to sell.  For example, if the want to sell Ferrari they can do it without bond holder approval.

Packer
Title: Re: FIATY - Fiat S.p.A.
Post by: brker_guy on August 07, 2013, 04:27:18 PM
Too Sexy for FIAT?

http://trc.taboola.com/bloomberg/log/3/click?pi=http%3A%2F%2Fwww.bloomberg.com%2F&ri=32a8d8c24ce945840d31c4141ddc3881&sd=v1_73cd3ee7bfc063de4710b52a660c5a2a_76edd97c-43dc-4d2d-b7aa-c9f23eb097ca_1375916446_1375917777&ui=76edd97c-43dc-4d2d-b7aa-c9f23eb097ca&it=video&ii=-1548868282234316660&pt=home&li=rbox-h2v&url=http%3A%2F%2Fwww.bloomberg.com%2Fvideo%2Ftoo-sexy-nude-models-the-new-push-to-sell-cars-t4y7dRxpRqK7psmJ_GDUAQ.html&r=13

Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on August 08, 2013, 08:33:44 AM
If the debtholders have a security in the assets & Fiat runs into issues they need to get their approval to sell.  For example, if the want to sell Ferrari they can do it without bond holder approval.

Packer

That is true. But I guess for unsecured note holders, if Fiat transfers all of the assets out and files bankruptcy within 6 months, it can be sued for fraudulent conveyance and the judge can order the assets to come back.

http://en.wikipedia.org/wiki/Fraudulent_conveyance

A transfer will be fraudulent if made with actual intent to hinder, delay or defraud any creditor. Thus, if a transfer is made with the specific intent to avoid satisfying a specific liability, then actual intent is present.


So theoratically this is not bullet proof, though I understand that FIATY is probably not likely to get into this situation.
Title: Re: FIATY - Fiat S.p.A.
Post by: jch548 on August 08, 2013, 07:31:29 PM
Marchionee was quoted in today's WSJ in an article on the European economy. He stated "If the industrial conditions in Italy remain such that it is impossible to properly govern the industrial operations in this country then any commitment we have to this country is up for grabs."

Seems he is positioning for some future drastic changes. Talk of moving HQ to Detroit or the Netherlands then the above. Too much excess capacity in Italy...
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on August 08, 2013, 11:04:02 PM
I think that's been taken from the CC
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on August 09, 2013, 05:26:13 PM
http://online.wsj.com/article/SB10001424127887323971204578628040738330064.html?mod=WSJ_hps_LEFTTopStories (http://online.wsj.com/article/SB10001424127887323971204578628040738330064.html?mod=WSJ_hps_LEFTTopStories)


Fiat Workers Paid to Stay Home Amid Car Slump


Maria Epifania has a good job assembling cars at Fiat SpA's F.MI +2.07%Mirafiori factory in northern Italy, except that she has barely worked in the last two years.

Nonetheless, she receives part of her pay, some €800 ($1,053) a month, through a state-run program that helps workers on forced leave make ends meet. Ms. Epifania, a 39-year-old single mother, could be called back to Mirafiori someday. But she has her doubts about her chances of returning to work.

...

After shuttering a factory in Sicily in 2011, Fiat has avoided further closures and layoffs in its home country. Instead, it has left its five car factories there idle for extended periods to cut costs and prepare for an eventual recovery. Workers are paid to stay home.

The Mirafiori plant, a massive structure in Fiat's hometown of Turin, used to employ tens of thousands of workers to churn out more than 300,000 cars annually. Last year, it produced fewer than 50,000 cars, not enough to provide work for the 5,500 people assigned to its assembly line.

Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on August 12, 2013, 10:04:05 PM
http://video.cnbc.com/gallery/?play=1&video=3000190067 (http://video.cnbc.com/gallery/?play=1&video=3000190067)

interview with  Robert Graczyk, Maserati North America president & CEO
Title: Re: FIATY - Fiat S.p.A.
Post by: txlaw on August 21, 2013, 03:55:40 PM
http://www.bloomberg.com/video/this-apple-red-ferrari-now-harder-than-ever-to-buy-VH874trzT~iaYlpvzU1Hew.html
Title: Re: FIATY - Fiat S.p.A.
Post by: jay21 on August 24, 2013, 09:33:12 AM
Fiat and Chrysler
Hoping it will hold together

http://www.economist.com/news/business/21584001-union-fiat-and-chrysler-has-better-chances-both-carmakers-previous-alliancesbut

"There is no doubt that Fiat will get its hands on the remainder of Chrysler, with a deal probably struck by the end of the year, reckons Philippe Houchois of UBS, a bank. VEBA needs to sell, either directly to Fiat or through an IPO, to raise money for the growing medical bills of retired car workers. What is unclear is the price: anywhere between Fiat’s valuation of $1.8 billion and the $4.3 billion that VEBA wants."

"The merged Fiat-Chrysler will probably chug along, neither attaining the dominant scale of a VW or Toyota nor the profitability of smaller carmakers like BMW and Jaguar Land Rover. And there is no obvious successor to Mr Marchionne, a clever strategist who has saved two carmakers from oblivion but cannot go on for ever. His joining of two of the world’s weakest firms into one that stands a chance of long-term survival has been a triumph for those whose jobs depend on them. But for the rest of the rich world’s carmakers, it has kept alive a lot of capacity that they would rather have seen close. Fiat-Chrysler’s rivals must wish Mr Marchionne had never picked up his welding gear."
Title: Re: FIATY - Fiat S.p.A.
Post by: jay21 on August 26, 2013, 11:18:12 AM
If the debtholders have a security in the assets & Fiat runs into issues they need to get their approval to sell.  For example, if the want to sell Ferrari they can do it without bond holder approval.

Packer

Packer, any thoughts on the debt of Chrysler and Fiat?  I know you spend some time looking at debt and equity relative value so I was curious.

I'm taking a quick look at Chrysler's balance sheet and, based on a rough guess, it looks like debt repricing could add over $100m to earnings.  Do you think I am off base based upon what you know about the debt markets for the companies and the auto industry?
Title: Re: FIATY - Fiat S.p.A.
Post by: txlaw on September 04, 2013, 08:44:18 AM
http://www.freep.com/article/20130903/BUSINESS01/309030164/auto-sales-august-ford-gm
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on September 04, 2013, 05:13:54 PM
Fiat May Face 2015 Trial Over Value of UAW Chrysler Stock

http://www.bloomberg.com/news/2013-09-04/fiat-may-face-2015-trial-over-value-of-uaw-chrysler-stock.html (http://www.bloomberg.com/news/2013-09-04/fiat-may-face-2015-trial-over-value-of-uaw-chrysler-stock.html)

Fiat SpA (F) may have to wait until 2015 for a trial over the value of some Chrysler Group LLC shares owned by a union health-care fund, further delaying a plan to combine the two companies.

Lawyers for a United Auto Workers trust fund are asking Delaware Chancery Court Judge Donald Parsons to hold a January 2015 trial on the terms of a stock agreement covering at least 54,000 Chrysler shares, according to court filings. Fiat is seeking a May 2014 trial, according to the filings.

Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on September 05, 2013, 11:57:34 AM
Fiat Gives Go Ahead to Build Maserati SUV in Italy

http://online.wsj.com/article/SB10001424127887323623304579054912852343796.html?mod=WSJ_business_whatsNews (http://online.wsj.com/article/SB10001424127887323623304579054912852343796.html?mod=WSJ_business_whatsNews)

Fiat SpA F.MI -0.77%is going ahead with a planned €1 billion ($1.31 billion) investment to retool its aging Mirafiori factory, the latest investment by the auto maker to revive its underused Italian facilities.

Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on September 09, 2013, 05:45:53 AM
Quote
Fiat SpA (F) Chief Executive Officer Sergio Marchionne will not attend the International Auto Show in Frankfurt, Europe’s biggest auto event, because of “unforeseen business commitments,” the automaker said.

This marks the first time in recent years that Marchionne, 61, will not attend a major car show in the region. Chairman John Elkann will also not be in Frankfurt, Fiat said.

http://www.bloomberg.com/news/2013-09-09/fiat-chief-skips-frankfurt-show-on-unforeseen-commitments.html


Do I smell negotiations/dealmaking?
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on September 09, 2013, 07:41:22 AM
They went for lunch together yesterday, had too much lobster and are now both sick in bed..
Title: Re: FIATY - Fiat S.p.A.
Post by: hellsten on September 09, 2013, 08:05:31 AM
They went for lunch together yesterday, had too much lobster and are now both sick in bed..

Good news… Looks like Berlusconi and his hookers weren't involved, because FIATY is up ~5% today. A good day for Italy. Even TI is up 25%. The stars are aligning. This will be a good year :P
Title: Re: FIATY - Fiat S.p.A.
Post by: plato1976 on September 10, 2013, 02:36:02 PM
They better reach a deal asap -
both sides don't want to wait for too long;
I think we have 30% very easy upside when the merge is clear


They went for lunch together yesterday, had too much lobster and are now both sick in bed..

Good news… Looks like Berlusconi and his hookers weren't involved, because FIATY is up ~5% today. A good day for Italy. Even TI is up 25%. The stars are aligning. This will be a good year :P
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on September 12, 2013, 02:09:34 PM
http://online.wsj.com/article/SB10001424127887324591204579037172309407990.html?mod=WSJ_hps_LEFTTopStories (http://online.wsj.com/article/SB10001424127887324591204579037172309407990.html?mod=WSJ_hps_LEFTTopStories)


Gianni Agnelli, the Godfather of Style

The Italian industrialist who ran Fiat during the jet-set age was one of the most stylish men of the 20th century. Many have copied his casually inventive look, but his elegance remains inimitable
Title: Re: FIATY - Fiat S.p.A.
Post by: brker_guy on September 12, 2013, 02:22:32 PM


http://www.autonews.com/apps/pbcs.dll/article?AID=/20130912/OEM/130919921/fiat-may-have-to-pay-top-dollar-to-avoid-chrysler-ipo-report-says#

Quote
A retiree health care trust will force Chrysler Group to go public unless parent Fiat S.p.A. agrees to pay top dollar -- more than $5 billion -- for the trust's stake in the automaker, several people familiar with the matter said.
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on September 13, 2013, 12:54:06 PM
http://online.wsj.com/article/SB10001424127887324576304579073103017763932.html?mod=WSJ_business_whatsNews (http://online.wsj.com/article/SB10001424127887324576304579073103017763932.html?mod=WSJ_business_whatsNews)

Chrysler This Month Could Begin Process to Go Public

UAW Retiree Trust With 41% Stake Wants Auto Maker to List Shares .
Title: Re: FIATY - Fiat S.p.A.
Post by: LC on September 13, 2013, 05:15:54 PM
how can the UAW go public with the shares when Fiat has the option to buy them at a contractually agreed upon price...
Title: Re: FIATY - Fiat S.p.A.
Post by: Olmsted on September 13, 2013, 06:11:27 PM
The IPO wouldn't be their whole position. Fiat has options to buy something like 16% of Chrysler, less than half the UAW VEBA's stake.
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on September 16, 2013, 01:48:26 PM
http://dealbook.nytimes.com/2013/09/16/marchionne-still-low-balling-chrysler/ (http://dealbook.nytimes.com/2013/09/16/marchionne-still-low-balling-chrysler/)

Marchionne Still Low-Balling Chrysler

...
Fiat’s offers so far are valuing VEBA’s stake at about $2.5 billion. It could afford a more realistic price of $5 billion or more – which would still make its acquisition of Chrysler an overall bargain. Concerns about overleverage could be dealt with by raising fresh capital — either by issuing new shares or, possibly, by spinning off Ferrari.
...
Title: Re: FIATY - Fiat S.p.A.
Post by: jay21 on September 16, 2013, 06:03:03 PM
Very good presentation from Fiat on Maseratti:  http://www.fiatspa.com/it-IT/investor_relations/investors/presentazioni/FiatDocuments/2013/MainFirst_Auto_IAA_Investor_and_Analyst_Conference_Sep_10_2013.pdf

We should be seeing substantial improvement this year and next:

http://europe.autonews.com/article/20130828/ANE/130829917/maserati-car-orders-almost-triple-on-new-models#axzz2f6hx3idV

"Fiat Group's Maserati brand received about 17,000 orders worldwide in the year to end-July, nearly triple the amount sold last year as new models started to attract buyers."
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on September 16, 2013, 11:01:10 PM
Maserati is indeed doing very very well :)

Comment from Morningstar Folks on Chrysler IPO:

Analyst Note |  Sep 16 2013 |  Richard Hilgert
In our opinion, media reports about a Chrysler initial public offering of the United Auto Workers VEBA trust shares are a matter of brinkmanship. We were surprised to see the UAW use the media this soon in the negotiation process with Fiat FIATY, a posturing tactic it is well known for in the Detroit media.

Our discounted cash flow model assumes that an agreement on the VEBA stake will be reached by the middle of 2014. We factor in about $4.2 billion, or EUR 3.2 billion, in cash and debt from Fiat to the voluntary employees' beneficiary association to complete the transaction. A couple of hundred million euros in either direction would have a minimal impact on our EUR 14 fair value estimate.

The UAW is pressed to maximize the value of Chrysler to fund its retiree health-care account, which now has sole management of the trust, a growing liability as more Chrysler workers retire and health-care costs rise. Fiat has the obvious incentive to minimize the price it pays for the Chrysler stake due to losses in its EMEA region, an already stretched balance sheet, and substantial investment plans to renew an aging model lineup in Europe.

In our opinion, the price sought by the UAW VEBA is too high. According to media reports, the UAW VEBA trust is demanding that Fiat pay $5.0 billion for the stake or it will direct Chrysler to sell its stock in an IPO. This means that the UAW believes the IPO will gross more than $5.0 billion, so that after investment banking fees, the net proceeds realized will be equal to or more than the $5.0 billion price it wants for the 41.5% Chrysler stake. This values the company at an enterprise value/EBITDA multiple of 4.5 times our estimated 2013 EBITDA. We think a multiple of around 4.0 times is more reasonable and results in a $2.8 billion difference in the equity value ($12.9 billion at 4.5 times versus $10.1 billion at 4.0 times).

Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on September 18, 2013, 07:09:46 AM
http://www.bloomberg.com/news/2013-09-17/marchionne-prepares-final-hand-in-chrysler-merger-game.html (http://www.bloomberg.com/news/2013-09-17/marchionne-prepares-final-hand-in-chrysler-merger-game.html)

Marchionne Prepares Final Hand in Chrysler Merger Game
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on September 19, 2013, 04:47:15 AM
Quote
If all else fails, Marchionne still has a standing agreement to pay about $6 billion for the stake. Should the IPO market point to a higher value than that, he could exercise his option to buy at the fixed price. If investors indicate the shares are worth less than that, Marchionne would only need to offer more than the market valuation to take control.

Marchionne, who said last week that he’s looking to pay less than $5 billion for the holding, expects the market to apply a minority discount on the stake, said one of the people, who asked not to be identified because the discussions are private. A representative of the Italian carmaker declined to comment. Matt Wood, a spokesman for the Chrysler Veba, didn’t respond to a voice message or e-mail.


So

A) They negotiate a price privately < 6 bn
B) They do the IPO
B1) Investors do not apply a minority discount = the stake is bought for 6 bn
B2) Investors do apply a minority discount ==> arbritagers come in and buy at the discount because they know of the implied call that Marchionna has + his desire to buy the stake? => stake is bought for 6 bn

What do you guys think of this IPO strategy??
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on September 20, 2013, 02:33:19 AM
Quote
Marchionne Said to Hire Obama Car Czar Bloom for Chrysler Advice
2013-09-20 01:33:37.695 GMT


By Elisa Martinuzzi, Jeffrey McCracken and Jeff Green
     Sept. 20 (Bloomberg) -- Fiat SpA Chief Executive Officer
Sergio Marchionne hired Ron Bloom, who helped run President
Barack Obama’s auto-industry team, to advise the carmaker on
buying the rest of Chrysler Group LLC, a person familiar with
the matter said.
     Bloom, now a Lazard Ltd. vice chairman, will assist the
Fiat CEO in trying to strike a deal with the United Auto
Workers’ retiree health-care trust, the only other shareholder
in Chrysler, said the person, who asked not to be identified
because the matter is private. Marchionne needs an agreement to
complete his takeover of the U.S. auto manufacturer.
     At the same time that he seeks concessions on behalf of the
Fiat boss, Bloom is advising Detroit retirees fighting benefit
cuts in the city’s $18 billion bankruptcy.
     The unrelated roles mean Bloom, 58, will be defending
worker benefits in Detroit while trying to trim them at
Chrysler. He’s had experience in both arenas. The Lazard banker
with a Harvard Business School degree worked with corporate
clients on hundreds of bankruptcies and also spent 13 years
advising the United Steelworkers union president.
     Judi Mackey, a Lazard spokesman, confirmed the Detroit
role. She declined to comment on the Fiat position.
     Bloom’s new mandates reflect his longstanding ties to the
auto industry and place him on opposite sides of the table from
officials he worked with in an earlier era.

                          Auto Bailout

     The Detroit bankruptcy role pits Bloom against Detroit
Emergency Manager Kevyn Orr, one of the lawyers for Chrysler and
Marchionne when Bloom helped lead the $80 billion bailout that
saved General Motors Co. and Chrysler in 2009. Andrew Yearley,
who negotiated opposite Bloom for the UAW during the Chrysler
bankruptcy, now will be his partner in Detroit.
     Bloom and Yearley will provide financial advice to the
committee representing Detroit retirees in the bankruptcy case.
     At Fiat, Marchionne, 61, has spent the past four years
seeking to unify the companies so they can better compete with
Toyota Motor Corp., GM and Volkswagen AG. A fully integrated
automaker would feature the mass-market Fiat, Chrysler, Jeep and
Dodge brands, along with high-end Maserati and Ferrari cars.
     Marchionne first must reach a deal that resolves a
valuation dispute with the trust, known as a voluntary employee
beneficiary association. The U.S. carmaker may file initial
public offering documents this week with the U.S. Securities and
Exchange Commission to list a 16.6 percent stake. The trust,
which owns 41.5 percent of Chrysler, has the legal right to
initiate the sale under the terms of its holding.

                          Treasury Deal

     Bloom worked closely with Marchionne in 2009 when the Fiat
CEO negotiated with the U.S. Treasury to acquire a controlling
stake in Auburn Hills, Michigan-based Chrysler. A representative
at Turin, Italy-based Fiat declined to comment.
     Bloom has been working with Marchionne for months and is
helping him understand the priorities of the UAW and the health-
care trust, the person said. Because of his longstanding ties to
labor, Bloom has also served as a backdoor channel to the UAW,
the person said.
     Fiat currently owns 58.5 percent of Chrysler. It started
accumulating the stock in 2009, building on an initial 20
percent holding received as part of a government-backed bailout
of the U.S. carmaker, which was losing as much as $100 million a
day at the time. The trust received its stake as part of the
rescue package.

                          Market Value

     Marchionne’s ultimate goal is to use the IPO process to set
a market value for the trust’s holding and force the labor group
back to the bargaining table, people familiar with the matter
said earlier this month. The trust has been holding out on
selling its Chrysler stake, seeking at least $1 billion more
than Fiat wants to pay. The two sides are in court over the
value of the initial shares that Fiat has options to buy.
     In Detroit, Bloom will need to argue against trimming
benefits. The pensioners have said the Michigan Constitution
protects the unfunded benefits from proposed cuts of as much as
90 percent in the $18 billion bankruptcy. Orr and his boss,
Michigan Governor Rick Snyder, have countered that under U.S.
bankruptcy law the police, fire and city retirees are unsecured
creditors, like bondholders, and aren’t exempt from potential
cuts.
     Bill Nowling, a spokesman for Orr, didn’t immediately
respond to an e-mail seeking comment.
     Bloom rejoined Lazard in February 2012 after resigning in
August 2011 from a White House post advising Obama on
manufacturing policy. Orr, 55, who worked on the Chrysler
restructuring, left the law firm Jones Day in March to take the
job overseeing Snyder’s takeover of Detroit.

                        Growing Industry

     The industry bailout that Bloom helped lead and Orr advised
on has produced a U.S. auto industry with sales headed for a
fifth straight year of annual increases. Chrysler has reported
41 straight months of gains, and GM has said it expects a modest
improvement over its $6.19 billion in earnings in 2012 as it
heads for its fourth consecutive annual profit. Next year, U.S.
auto sales are projected to exceed 16 million for the first time
since 2007.
     Bloom became Obama’s top manufacturing adviser after the
auto bailouts. Before joining the bailout team in 2009, Bloom
was an adviser to the United Steelworkers union and a
manufacturing specialist at Hamilton, Bermuda-based Lazard.

                       Defending Pensions

     During the auto bailouts, Bloom argued that pensions for
UAW members deserved protection even as bondholders and banks
faced cuts because the workers were necessary to build cars and
trucks once the companies exited court protection. A bankruptcy
judge supported that position.
     Detroit’s retired public workers will be represented by
nine people, including at least two union officials, on a panel
that may negotiate with the city, a U.S. trustee monitoring the
bankruptcy decided last month.
     Orr said in a July interview that a retiree committee is
needed because, unlike union members or bond investors, the
pensioners don’t have a strong organization backing them.
     Detroit retirees joined unions earlier this month in
claiming the bankruptcy law that lets municipalities seek court
protection from creditors violates the U.S. Constitution.
     The groups, which want the bankruptcy case thrown out in a
hearing next month, also point to a line in the Michigan
Constitution that says public-worker pensions are a contractual
right that cannot be undone.
     The retirees argue that Chapter 9 of the U.S. Bankruptcy
Code can’t trump a state constitution. The groups asked U.S.
Bankruptcy Judge Steven Rhodes to find either that the
bankruptcy filing doesn’t meet the tests set out in Chapter 9 or
that Chapter 9 itself violates the U.S. Constitution because it
interferes with Michigan’s sovereignty.

                        Bankruptcy Judges

     In business cases, where Orr has more experience, federal
courts have routinely upheld the power of bankruptcy judges to
impair or cancel contractual rights, even those protected by
state laws.
     Before joining Jones Day, Orr held several U.S. government
jobs, including director of the Justice Department unit that
oversees bankruptcy cases and trustees, according to the law
firm.
     As an adviser to the United Steelworkers for 13 years, and
before that as a manufacturing specialist at Lazard and his own
boutique investment firm, Bloom participated in more than 100
bankruptcies and restructurings, trying to balance the realities
of business with the need for jobs, he said in a 2010 interview.
     Marchionne praised Bloom in a 2011 interview for working
around the clock to complete the deal on Chrysler in 2009,
saying he once had a conversation with the banker on the steps
of the U.S. Treasury building during a cigarette break.
     “I asked him: what the hell are you doing here?”
Marchionne said at the time. Bloom “turned around and he said,
‘when I die, I want to be able to put on the tombstone: he made
the difference.’”
     The Detroit case is City of Detroit, 13-bk-53846, U.S.
Bankruptcy Court, Eastern District of Michigan (Detroit).
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on September 20, 2013, 09:45:05 AM
http://online.wsj.com/article/SB10001424127887323308504579086760224349826.html?mod=WSJ_business_whatsNews (http://online.wsj.com/article/SB10001424127887323308504579086760224349826.html?mod=WSJ_business_whatsNews)


Fiat's Marchionne Turns to Union Ally Bloom to Help With Chrysler Talks


Auto Maker Seeks Favorable Price in Negotiations With UAW .
Title: Re: FIATY - Fiat S.p.A.
Post by: vpagano on September 23, 2013, 02:19:14 PM
Chrysler S-1 is out:

http://www.sec.gov/Archives/edgar/data/1513153/000119312513374811/d564443ds1.htm#toc564443_9
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on September 23, 2013, 02:22:48 PM
Chrysler S-1 is out:

http://www.sec.gov/Archives/edgar/data/1513153/000119312513374811/d564443ds1.htm#toc564443_9

With all the noise at BlackBerry thread, I didn't see this earlier.


The Negotiation must be getting into the weeds by now...
Title: Re: FIATY - Fiat S.p.A.
Post by: jay21 on September 23, 2013, 06:21:08 PM
Quote
If all else fails, Marchionne still has a standing agreement to pay about $6 billion for the stake. Should the IPO market point to a higher value than that, he could exercise his option to buy at the fixed price. If investors indicate the shares are worth less than that, Marchionne would only need to offer more than the market valuation to take control.

Marchionne, who said last week that he’s looking to pay less than $5 billion for the holding, expects the market to apply a minority discount on the stake, said one of the people, who asked not to be identified because the discussions are private. A representative of the Italian carmaker declined to comment. Matt Wood, a spokesman for the Chrysler Veba, didn’t respond to a voice message or e-mail.


So

A) They negotiate a price privately < 6 bn
B) They do the IPO
B1) Investors do not apply a minority discount = the stake is bought for 6 bn
B2) Investors do apply a minority discount ==> arbritagers come in and buy at the discount because they know of the implied call that Marchionna has + his desire to buy the stake? => stake is bought for 6 bn

What do you guys think of this IPO strategy??

I think the strategy is to never IPO.  The IPO process that is going on now is designed to get a market price for Marchionne to negotiate with.

http://online.wsj.com/article/SB10001424052702304213904579093654095921412.html?mod=pls_whats_news_us_business_f

"Fiat Chief Executive Sergio Marchionne, who also leads Chrysler, wants to own Chrysler outright and merge the two companies into a single auto maker. Mr. Marchionne has said a public offering could come in the first quarter of 2014, but that he wants to avoid one by buying out the union trust's holdings in a private deal. A deal between Fiat and the UAW trust could still take place before any shares are sold."

"However, Mr. Marchionne, as Chrysler CEO, is in the awkward situation of having to meet with investors and persuade them to pay top dollar for shares that as Fiat's CEO he would prefer to buy on the cheap."

My Comment:  Is there any possible meritorious case the VEBA can bring against Marchionne for breach of fiduciary duty?  I would hate to see this drag on if the price isn't right in the IPO.

"If Mr. Marchionne is able to gain full control of Chrysler, he could launch a new share offering for the combined company to raise money for new product investments and restructuring."

My Comment:  I do not see this happening with the cash he will get his hands on when Chrylser is consolidated.
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on September 23, 2013, 09:41:48 PM
http://blogs.wsj.com/corporate-intelligence/2013/09/23/the-chrysler-ipo-a-game-of-chicken-goes-public/?mod=WSJBlog&mod=WSJ_corp_intel (http://blogs.wsj.com/corporate-intelligence/2013/09/23/the-chrysler-ipo-a-game-of-chicken-goes-public/?mod=WSJBlog&mod=WSJ_corp_intel)

The Chrysler IPO: A Game of Chicken Goes Public
Title: Re: FIATY - Fiat S.p.A.
Post by: mankap on September 24, 2013, 09:35:30 AM
There is very good info. on the thread on FIAT.
I have started reading on FIAT.
The opportunity looks very interesting with little downside risk.

I am watching the game of chicken between UAW and FIAT.
I think they will agree on the price before the IPO.
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on September 24, 2013, 03:55:52 PM
http://online.wsj.com/article/SB10001424052702303759604579095431842965894.html?mod=WSJ_business_LeadStoryRotator (http://online.wsj.com/article/SB10001424052702303759604579095431842965894.html?mod=WSJ_business_LeadStoryRotator)

Fiat Needs Chrysler More Than Ever

Italian Auto Maker's Warning It Could Curb Ties Doesn't Hold Up.
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on September 24, 2013, 04:31:09 PM
http://www.bloomberg.com/news/2013-09-23/chrysler-files-for-ipo-as-fiat-seeks-deal-to-merge-automakers.html (http://www.bloomberg.com/news/2013-09-23/chrysler-files-for-ipo-as-fiat-seeks-deal-to-merge-automakers.html)

Fiat Threatens Chrysler Pullback With Union-Pushed IPO
Title: Re: FIATY - Fiat S.p.A.
Post by: CanadianMunger on September 24, 2013, 05:35:16 PM
I've seen mentioned here what Fiat would do in a European nightmare scenario - distribute Chrysler and Ferrari to shareholders.

Now, whats the downside if, along with a nightmare European scenario, we have a nightmare North American scenario (deflation)?  Merged or not, would Chrysler/Fiat survive with the debt it has?

Thanks,

-CM
Title: Re: FIATY - Fiat S.p.A.
Post by: Packer16 on September 24, 2013, 07:18:58 PM
If we have deflation in NA, the only investment that may go up is Fairfax.  I just do not see how deflation occurs with all of these QEs going on and no inclination to stop them.

Packer
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on September 24, 2013, 07:40:09 PM
http://www.nytimes.com/2013/09/25/business/fiat-chief-rolls-dice-on-market-and-chrysler-merger.html?ref=business&_r=0 (http://www.nytimes.com/2013/09/25/business/fiat-chief-rolls-dice-on-market-and-chrysler-merger.html?ref=business&_r=0)

Fiat Chief Rolls Dice on Market and Chrysler Merger
Title: Re: FIATY - Fiat S.p.A.
Post by: jay21 on September 25, 2013, 05:04:11 AM
I've seen mentioned here what Fiat would do in a European nightmare scenario - distribute Chrysler and Ferrari to shareholders.

Now, whats the downside if, along with a nightmare European scenario, we have a nightmare North American scenario (deflation)?  Merged or not, would Chrysler/Fiat survive with the debt it has?

Thanks,

-CM

If we have deflation in NA, the only investment that may go up is Fairfax.  I just do not see how deflation occurs with all of these QEs going on and no inclination to stop them.

Packer

Chrysler cash $11.8b: http://www.sec.gov/Archives/edgar/data/1513153/000119312513332881/d554670d10q.htm

I think they are pretty safe.

Also, while I appreciate the focus on the downside, I agree with Packer here.  I see such a small chance of an Armageddon situation in the US that would cause Chrysler to go bankrupt.  Also, I think the economic backdrop of the auto industry is pretty favorable as discussed on this board.
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on September 26, 2013, 03:45:58 PM
Chrysler’s Owners Race for the Cliff

 



http://www.nytimes.com/2013/09/27/business/chryslers-owners-race-for-the-cliff.html (http://www.nytimes.com/2013/09/27/business/chryslers-owners-race-for-the-cliff.html)
Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on September 27, 2013, 04:11:06 AM
Quote
If all else fails, Marchionne still has a standing agreement to pay about $6 billion for the stake. Should the IPO market point to a higher value than that, he could exercise his option to buy at the fixed price. If investors indicate the shares are worth less than that, Marchionne would only need to offer more than the market valuation to take control.

Marchionne, who said last week that he’s looking to pay less than $5 billion for the holding, expects the market to apply a minority discount on the stake, said one of the people, who asked not to be identified because the discussions are private. A representative of the Italian carmaker declined to comment. Matt Wood, a spokesman for the Chrysler Veba, didn’t respond to a voice message or e-mail.


So

A) They negotiate a price privately < 6 bn
B) They do the IPO
B1) Investors do not apply a minority discount = the stake is bought for 6 bn
B2) Investors do apply a minority discount ==> arbritagers come in and buy at the discount because they know of the implied call that Marchionna has + his desire to buy the stake? => stake is bought for 6 bn

What do you guys think of this IPO strategy??

How about this:
1. 16.6% of Chrysler gets IPO´d.
2. FIAT uses its call options to bring its ownerships 75.1%.
3. While the court settles the pricing of the call options, FIAT buys 4.9% of Chrysler in the open, bringing its holdings to 80% and thus gaining control over the cash flows.
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on September 27, 2013, 12:18:25 PM
Can you direct me to the accounting standard for the 80% rule?

Thanks!
Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on September 27, 2013, 03:40:12 PM
Can you direct me to the accounting standard for the 80% rule?

Thanks!

http://www.mofo.com/files/Uploads/Images/1302-The-Acquisition-of-Control-of-a-United-States-Public-Company.pdf

Page 26:
Quote
For U.S. federal income tax purposes, two U.S. corporations can file a consolidated return for federal tax purposes if one corporation owns at least 80% of the voting power and value of the other corporation. Thus, if the acquiror acquires 80% or more of the voting stock of the target, it should be eligible to include the target in its consolidated federal tax return. Filing a consolidated return provides the benefit of allowing losses from one member of the consolidated group to offset income of other group members. In addition, dividend distributions received by the acquiror from the target are excluded from the acquiror’s income for purposes of computing the consolidated group’s taxable income.

In general, the target’s tax attributes (including tax basis in its assets) do not change following its acquisition. When a target enters a consolidated group, however, its existing NOLs incurred in taxable years prior to entrance are subject to limitations. Usually such NOLs can only be used against the income of the target itself or, if that target was part of another consolidated group that entered the acquiror’s group together, against the income of such target subgroup.

In addition, if the acquiror owns more than 80% of the stock of the target after the acquisition, the acquiror may exclude 100% of the dividends received from the target from its income, irrespective of whether it elects to file consolidated tax returns. If the acquiror owns less than 80% but more than 20% of the target’s stock, it will be entitled to deduct 80% of the dividends distributed by the target.
If the acquiror is foreign, dividends paid by the target will be subject to a 30% U.S. withholding tax. This withholding tax may be reduced or eliminated by an applicable tax treaty between the U.S. and the acquiror’s country of residence. Sales of the target’s stock by the acquiror generally are not subject to U.S. withholding tax.
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on September 28, 2013, 05:25:23 AM
Thanks!
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on September 29, 2013, 02:36:57 AM
i have a lot of fiat Shares.
i believe fiat and the VEBA make a deal before the IPO. Last Minute.
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on September 29, 2013, 08:29:13 AM
i have a lot of fiat Shares.
i believe fiat and the VEBA make a deal before the IPO. Last Minute.

What is your average cost?
I bought 15% around $5.9, and I had a 15% position in EXO. Perhaps I should have just put 30% into FIATY, but the price is a bit high now to make the switch. ::)
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on September 29, 2013, 08:38:55 AM
you are a lucky guy with this cost average and you definetly put more into it  :D. iam in at 7,15$ and 7,95$ so i was a Little late to the Party. but i think fiat is a good Investment still after the increase in Price. Pabrai have a few fiat Shares and likes it. at the  annual Meeting this year from him in California he played 4 fiat Commercials. Great Value Play.
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on September 29, 2013, 08:53:09 AM
you are a lucky guy with this cost average and you definetly put more into it  :D. iam in at 7,15$ and 7,95$ so i was a Little late to the Party. but i think fiat is a good Investment still after the increase in Price. Pabrai have a few fiat Shares and likes it. at the  annual Meeting this year from him in California he played 4 fiat Commercials. Great Value Play.

I put more into it than you? Are you new to this board? Normally when people (Ericopoly, valuecfa etc) say they have "a lot" of something, it usually means 50-70% of their entire portfolio. I thought you meant the same. :)
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on September 29, 2013, 09:07:10 AM
yeah iam new to this board and glad to be here. when iam saying i have a lot of Shares it means 10-20% of my Overall Portfolio. i would love to have bought more at your cost Level. then i had a bigger Position.
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on October 01, 2013, 08:50:43 AM
Chrysler US auto sales top expectations

http://www.cnbc.com/id/101076356 (http://www.cnbc.com/id/101076356)



Quote
Chrysler Group surprised auto industry analysts with a modest 1 percent increase in U.S. car sales in September.

Chrysler, an affiliate of Italy's Fiat, said it sold 143,017 vehicles, handily beating analysts' expectations.
Title: Re: FIATY - Fiat S.p.A.
Post by: txlaw on October 02, 2013, 09:35:53 PM
http://www.bloomberg.com/video/the-sexy-alfa-at-the-center-of-chrysler-s-fight-0DAlwx36TCqJvV3vDGkgZA.html
Title: Re: FIATY - Fiat S.p.A.
Post by: brker_guy on October 08, 2013, 04:51:39 PM
Ferrari Says Sales in Japan to Rise 30% as Abe Revives Spending

http://www.bloomberg.com/news/2013-10-08/ferrari-says-sales-in-japan-to-rise-30-as-abe-revives-spending.html



I think Asia needs to step up and buy more Ferrari. ;-)
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on October 10, 2013, 06:32:41 AM
http://www.reuters.com/article/2013/10/09/us-autos-chrysler-ipo-idUSBRE9981D520131009
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on October 14, 2013, 02:50:32 PM
Trust Estimated Chrysler Stake Value at $3.6 Billion

http://online.wsj.com/news/articles/SB10001424052702304106704579135833832929954?mod=WSJ_business_whatsNews (http://online.wsj.com/news/articles/SB10001424052702304106704579135833832929954?mod=WSJ_business_whatsNews)
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on October 15, 2013, 12:39:48 AM
http://www.4-traders.com/FIAT-SPA-69342/news/Fiat-SpA--Fiat-fails-to-get-quick-trial-in-Chrysler-stake-dispute-17362335/


September 2014...
Title: Re: FIATY - Fiat S.p.A.
Post by: brker_guy on October 15, 2013, 01:29:44 PM
http://autos.yahoo.com/blogs/motoramic/jeep-cherokees-missing-action-thousands-stack-factory-192527121.html
Title: Re: FIATY - Fiat S.p.A.
Post by: buylowersellhigh on October 16, 2013, 07:49:07 AM
Any news this morning accounting for the 4% move downward?
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on October 16, 2013, 08:02:00 AM
i think its because of this
http://www.4-traders.com/FIAT-SPA-69342/news/Fiat-SpA--Fiat-fails-to-get-quick-trial-in-Chrysler-stake-dispute-17362335/


September 2014...
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on October 17, 2013, 07:01:30 AM
http://www.autonews.com/article/20131016/OEM01/131019914/fiat-union-plans-to-push-uaw-to-help-end-chrysler-deadlock#axzz2hzIquyn4
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on October 18, 2013, 07:54:38 AM
http://www.bloomberg.com/news/2013-10-16/marchionne-pins-alfa-romeo-revival-on-chrysler-s-cash.html (http://www.bloomberg.com/news/2013-10-16/marchionne-pins-alfa-romeo-revival-on-chrysler-s-cash.html)

Marchionne Pins Alfa Romeo Revival on Chrysler’s Cash
Title: Re: FIATY - Fiat S.p.A.
Post by: brker_guy on October 18, 2013, 01:37:57 PM
The review on the Maserati Ghibli from CR is also a nice reception to the product:

http://autos.yahoo.com/news/2014-maserati-ghibli-q4-first-drive-173000941.html

Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on October 23, 2013, 10:37:33 AM
http://www.nytimes.com/reuters/2013/10/23/business/23reuters-fiat-brazil-exclusive.html?src=busln (http://www.nytimes.com/reuters/2013/10/23/business/23reuters-fiat-brazil-exclusive.html?src=busln)

Fiat Likely to Miss Brazil Sales Targets-Sources
Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on October 24, 2013, 01:57:47 PM
Greenwood:

http://www.youtube.com/watch?v=Mtr9X8zslWA#t=438
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on October 24, 2013, 02:50:27 PM
Greenwood:

http://www.youtube.com/watch?v=Mtr9X8zslWA#t=438

thank you sportgamma for the link :)
Title: Re: FIATY - Fiat S.p.A.
Post by: mankap on October 24, 2013, 06:27:06 PM
Today Ford called a bottom in European car market. That bodes well for Fiat's European operation. I am eager to see the results of Fiat's Europe operations.
Title: Re: FIATY - Fiat S.p.A.
Post by: nikhil25 on October 25, 2013, 07:38:35 AM
Are you guys buying FIATY on OTC or F.MI.  :), any difference?. Thanks

Could someone please shed some light on this? Thanks so much!
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on October 27, 2013, 10:34:13 PM
http://online.wsj.com/news/articles/SB10001424052702304682504579154023194854250 (http://online.wsj.com/news/articles/SB10001424052702304682504579154023194854250)

As Chrysler Weighs an IPO, Investors Are Anxious for Data
Auto Maker's Debt and Spending Remain High; Earnings Out Wednesday
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on October 28, 2013, 06:45:00 AM
down over 4% today
Title: Re: FIATY - Fiat S.p.A.
Post by: LC on October 28, 2013, 07:17:27 AM
Are you guys buying FIATY on OTC or F.MI.  :), any difference?. Thanks

Could someone please shed some light on this? Thanks so much!
I am buying the ADR...not sure if there is much of a difference!

I assume it's down today as investors get squemish regarding the trial delay and the uncertainty regarding the Chrysler IPO
Title: Re: FIATY - Fiat S.p.A.
Post by: Ian L on October 28, 2013, 07:22:23 AM
I have bought a few today too. It could be related to the well publicised expectation of missing the Brazilian estimates.
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on October 28, 2013, 07:48:14 AM
i also bought more today. fiat is down over 10% the last days. fiat is one of the last possible Multi baggers in this high risen stock market. i like it very much
Title: Re: FIATY - Fiat S.p.A.
Post by: jch548 on October 28, 2013, 06:38:22 PM
There was a piece in the WSJ today on Chrysler. The main negatives were they had more debt than cash and their autos aren't as efficient as others with respect to mpg. They need to spend to get their vehicles up to par.

I read an article earlier this month that quoted Bernstein Research saying they could get their margins up to 7 to 8% in 2015. Today's story said their margins were 4.5% in Q2. I had been trying to pin down their operating margins so I was glad to see a figure quoted.

Chrysler did $65B in sales last year. If they can squeeze another 2.5% out that's $1.6B in extra ebitda annually. 65% or $1B accrues to Fiat. A six times ebitda multiple adds $6B to Fiat shares. Roughly a 60% increase to their present market cap.
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on October 28, 2013, 10:46:08 PM
Chrysler Amends IPO Filing, Highlighting Fiat Conflicts

http://www.bloomberg.com/news/2013-10-28/chrysler-amends-ipo-filing-highlighting-fiat-conflicts.html (http://www.bloomberg.com/news/2013-10-28/chrysler-amends-ipo-filing-highlighting-fiat-conflicts.html)
Title: Re: FIATY - Fiat S.p.A.
Post by: jay21 on October 29, 2013, 05:05:01 AM
There was a piece in the WSJ today on Chrysler. The main negatives were they had more debt than cash and their autos aren't as efficient as others with respect to mpg. They need to spend to get their vehicles up to par.

I read an article earlier this month that quoted Bernstein Research saying they could get their margins up to 7 to 8% in 2015. Today's story said their margins were 4.5% in Q2. I had been trying to pin down their operating margins so I was glad to see a figure quoted.

Chrysler did $65B in sales last year. If they can squeeze another 2.5% out that's $1.6B in extra ebitda annually. 65% or $1B accrues to Fiat. A six times ebitda multiple adds $6B to Fiat shares. Roughly a 60% increase to their present market cap.

They file so you can check the source.

Here's the 10-Q: http://www.sec.gov/Archives/edgar/data/1513153/000119312513332881/d554670d10q.htm

Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on October 29, 2013, 09:08:01 AM
http://www.bloomberg.com/news/2013-10-28/marchionne-speeds-up-jeep-china-push-as-fiat-falls-flat.html (http://www.bloomberg.com/news/2013-10-28/marchionne-speeds-up-jeep-china-push-as-fiat-falls-flat.html)


Marchionne Speeds Up Jeep China Push as Fiat Falls Flat
Title: Re: FIATY - Fiat S.p.A.
Post by: greatimes on October 29, 2013, 09:29:52 PM
Earnings on 10/30/13 could be volatile.

http://www.gwinvestors.com/Main/Blog/Entries/2013/10/29_F_IM__A_Messy_Quarter_Tomorrow%2C_Who_Cares.html



Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on October 30, 2013, 04:27:38 AM
http://www.fiatspa.com/en-US/media_center/FiatDocuments/2013/Ottobre/CHRYSLER_GROUP_LLC_Q3_2013_PressRelease.pdf

Chrysler Q3 - guidance for full Year confirmed
Title: Re: FIATY - Fiat S.p.A.
Post by: mankap on October 30, 2013, 06:08:15 AM
Looks like market did not like the result.It is down 6% in Europe.
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on October 30, 2013, 06:31:41 AM
thank mr market  i bought a lot more
Title: Re: FIATY - Fiat S.p.A.
Post by: buylowersellhigh on October 30, 2013, 07:51:23 AM
Any reason why the results aren't well received? 
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on October 30, 2013, 08:22:09 AM
they lowering the guidance for full Year Results for Fiat Group.
and had a lower then expected trading Profit.



good for me to buy more and enjoy the stock in a few years
Title: Re: FIATY - Fiat S.p.A.
Post by: Ian L on October 30, 2013, 08:40:35 AM
It is difficult to say what was priced in and what was not.
They reported worse results in North America and Brazil than a year ago (some of it caused by the weaker currencies compared to the Euro) and better results in Europe, Asia, Argentina and luxury brands. Maserati had a good quarter with revenues more than double Q3 2012. Net industrial debt was 8.3 billion, compared to 6.7 billion last quarter.

Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on October 30, 2013, 09:23:37 AM
http://www.bloomberg.com/news/2013-10-30/chrysler-quarterly-profit-increases-22-on-grand-cherokee.html (http://www.bloomberg.com/news/2013-10-30/chrysler-quarterly-profit-increases-22-on-grand-cherokee.html)

Chrysler Quarterly Profit Increases 22% on Grand Cherokee
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on October 30, 2013, 10:45:30 PM
http://dealbook.nytimes.com/2013/10/30/why-chrysler-needs-an-18-billion-valuation-to-justify-an-i-p-o/ (http://dealbook.nytimes.com/2013/10/30/why-chrysler-needs-an-18-billion-valuation-to-justify-an-i-p-o/)

Why Chrysler Needs an $18 Billion Valuation to Justify an I.P.O.
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on November 01, 2013, 10:49:19 AM
Chrysler posts 11 percent October US sales gain


http://www.cnbc.com/id/101162544 (http://www.cnbc.com/id/101162544)
Title: Re: FIATY - Fiat S.p.A.
Post by: racemize on November 01, 2013, 04:24:14 PM
The end of the Q&A was very interesting, particularly his talk about getting out of the mass market.

Also, there's some subtext about Germany going on in the last question, and he seemed to be getting pretty heated about it.

http://seekingalpha.com/article/1790552-fiats-ceo-discusses-q3-2013-results-earnings-call-transcript?part=single
Title: Re: FIATY - Fiat S.p.A.
Post by: LC on November 02, 2013, 10:20:32 AM
I have to say, that was a brilliant response by Marchionne about the relative factors affecting the European car business.  I recommend anyone listen to the last 17 minutes of the conference call (starting @ 1hr 4min) : http://www.media-server.com/m/p/5y8x3523
 
Just to summarize, the problem is essentially a game of chicken. Who will be the first to cut production in Europe? Marchionne hits it on the head: the first person to do it, loses! Everyone left can absorb the incremental capacity and run their plants at a higher utilization.

Therefore nobody does it. So Marchionne calls for a Euro-wide process under which all car makers do it equally, but that won't happen due to all the bloody politics that go on with an issue like that. So in the meantime, he pursues a strategy of using that excess capacity to other ends. To other regions, and to move up the ladder into luxury car production. It's the best move possible.

Really a brilliant guy, I encourage again to listen to the CC.
Title: Re: FIATY - Fiat S.p.A.
Post by: jay21 on November 02, 2013, 11:18:33 AM
The end of the Q&A was very interesting, particularly his talk about getting out of the mass market.

Also, there's some subtext about Germany going on in the last question, and he seemed to be getting pretty heated about it.

http://seekingalpha.com/article/1790552-fiats-ceo-discusses-q3-2013-results-earnings-call-transcript?part=single

This was great, glad you pointed it out.  There were two great questions and responses at the end of the call.

First question:

 Deutsche Bank
Okay maybe then jumping on to the second part. I think now it’s been a number of years where they’re not just on a stand alone basis and appreciating the one-time aspect of your bet increase. But Fiat on a relative basis against most of your global competitors is one of the most leverage entities. And while you are struggling to generate cash flow pretty much most of your competitors are currently highly cash generators and therefore much more in the position to continue to invest in the business and even in areas where from at least your perspective it doesn’t make it on a sense like in EMEA. Why should we not be afraid that if this gap continues to widen that with the current net debt position of Fiat your competitiveness is getting structurally impaired?

Sergio Marchionne - Chief Executive Officer
For one very simple reason the amount that’s less in terms of the investments of the investments that you’re making reference to post decision to postpone investments in EMEA the number is the best marginal. So I really wouldn’t worry about impairing anything unless you’re suggesting that the strategy of moving upscale of Maserati – in pending expansion into the premium brand with Alfa is born, is effectively born with a structural flaw and therefore would require a write-down thereafter.

But I'm not sure that we’re talking about significant impairment with any assets that are left over and you got to remember that the most significant investment that we’ve made in the last five years on the European side has been the introduction of the Panda and (indiscernible) and that brand is performing well. We have refused to invest and renew any of the other product lines in our midst because of the inability to recover never mind the cost of capital but just recovering capital exactly for the point that you raised the rewarding impairment charges which would have become inevitable going forward.

The general comment that you’ve made about us being excessive leverage, we’re going to have a lot of discussion about what the profit capital structure is if you compare to our competitors. That’s not, and there is also another single doubt that we do have a large amount of that which is also probably the large amount of liquidity which is unusual for somebody in our position.

We were born with a different capital structure than most others. [b]And I agree with you that we have not generated sufficient cash out of the current business to try and out of the mass-market business to try and justify having an optimistic view of the future or Fiat involved in the mass-market. That is a view that I have by the across all the competitors in the mass-market side its not just the Fiat view which is a reason why we have slowly but surely kept on defocusing the mass-market from the EMEA side of operation and try to build an industrial strategy that matches the brand development of two of the brands within the fold which have gone so far unexploited and which are capable of internationalization.[/b]

That process started and it’s by far not complete. And I think you will be incredibly premature and undoubtedly unwise to start forecasting impairment of capital yet to be committed if you adopt that you may have the relative success of the strategy of repositioning the Fiat as a group, all the Fiat as a group. And so I would wait before I sort of express the final view on this, especially view of the numbers that have been released by Maserati as an initial indication of the relative success of that strategy that we’ve outlined.

But it doesn’t take away from your fundamental contention about the fact that we are levered more than most but the different I think between us and anybody else was played historically in the mass-market and that’s something that we’re trying to leave behind because we realize that it’s some incredibly unrewarding activity. It’s unrewarding in terms of not just pricing its unrewarding in terms of recovering capital and the cost of capital associated with that commitment. We cannot do this anymore and so I won’t. And which is the reason why we’ve attracted a sufficient amount of criticism from I think spectators and other people alike on the wisdom of the strategy. The reality is that we have to protect the house and the only way to protect the house is to move the sandbox and replace somewhere else. The sandbox today in Europe is completely over crowded and I’ve seen nothing and I repeat this category we have seen nothing in terms of industry movements in Europe that will suggest any level of optimism of our performance in 2013 or 2014 regardless of what you hear from anybody else. We live in a market place everyday and some of the pricing practices that I’ve seen across Europe are things that I’ve never, ever seen since I came here in 2004. So this cannot continue nothing is going to have to give and it’s not going to be Fiat.

My comments:

This was a great response.  He clearly acknowledges there is a problem and he references his strategy of moving out of the mass market production and focusing on premiumization as a way for Fiat to combat the problem.  He mentioned that he has been criticized for spending too much on capex, but he notes none of the capex is targeted in Europe.  Maserati is now starting to see the benefit of that capex spend and he believes that the investments made will be successful.
Title: Re: FIATY - Fiat S.p.A.
Post by: jay21 on November 02, 2013, 11:29:12 AM
I have to say, that was a brilliant response by Marchionne about the relative factors affecting the European car business.  I recommend anyone listen to the last 17 minutes of the conference call (starting @ 1hr 4min) : http://www.media-server.com/m/p/5y8x3523
 
Just to summarize, the problem is essentially a game of chicken. Who will be the first to cut production in Europe? Marchionne hits it on the head: the first person to do it, loses! Everyone left can absorb the incremental capacity and run their plants at a higher utilization.

Therefore nobody does it. So Marchionne calls for a Euro-wide process under which all car makers do it equally, but that won't happen due to all the bloody politics that go on with an issue like that. So in the meantime, he pursues a strategy of using that excess capacity to other ends. To other regions, and to move up the ladder into luxury car production. It's the best move possible.

Really a brilliant guy, I encourage again to listen to the CC.

This is a great summary of the second question I alluded to:

UBS
I don’t disagree with you at all. I'm just looking the – you’ve been more conscious about excess capital spending than anybody else in the industry and that’s good. At the same time you’ve been vocal about excess capacity you talked about it more than anybody else probably etcetera. Today you have the worst excess capacity probably in Europe and you are doing the least without it compared to even (indiscernible) GM, Renault and forth.

Sergio Marchionne - Chief Executive Officer
Philippe let me tell you something. When you have $100 worth of available demand and you got 200%, $200 worth of available supply the only thing I could have done to worsen the situation is by turning on additional capacity to make the number larger than 200. So if I play the game that you suggested and I’ve been in the market like everybody else has and has invested equally to the competitors and I present the products fighting for the same market for which the current market participants are having a phenomenal difficulty in trying to acquire. We would have only made the situation worse.

My investment which by the way has been redirected and not postponed as selective strategy whereby the mass-market presence of Fiat is going to get seriously sequentially in a very disciplined way reduced overtime. Whatever capital I need to spend I need to spend on premium brand for which I have a higher level of certainty that they will have commercial success at a price. They cannot be done by continuing to repeat the historical mistakes that we’ve made here and I will not allow Fiat to do it. I just won’t.

So regardless of what everybody else thinks about whether we have or not, we are spending €8 billion worth of capital across the organization. That is not chicken money. On the one side I keep on being attacked of what we’re spending in the U.S. and on the other side I keep on being told that I'm under spending in Europe I got it. But the investment to me is absolutely fundable and it’s absolutely transferable. I don’t particularly where I invest in the architecture as long as I invest in it. Once I have that architecture established and installed it can be replicated on the fracture of the cost anywhere else.

The issue is who can afford that installation. Is it EMEA or is it some other part of the Fiat world can carry the burden. And if the answer is that some other part of the Fiat or the Fiat world had the other part carry it. But I cannot keep on fooling myself that Europe one day is going to wake up and make money at the other side of the channel it won’t. And by the way just to remind you last year four of the large European mass-market including Fiat lost $8 billion at operating level in running new operations. And I don’t know of an industry I’ve been in banking they can take that kind of punishment and survive into the long term.

Philippe Houchois - UBS
Yes I don’t think I'm suggesting what you’re saying I'm suggesting I'm just trying to draw you somewhere you probably don’t want to go to is the fact that you have not addressed the excess capacity you’ve narrated in Europe and until you do so…

Sergio Marchionne - Chief Executive Officer
Philippe listen to me. The question is now one day when we got time I’ll tell you joke about Harold and the Lord. The thing is why me.

Philippe Houchois - UBS
But others are doing…

Sergio Marchionne - Chief Executive Officer
As you start the question, the inherent problem is over capacity in the European context is the first mover disadvantage. The minute that you shutdown you benefit everybody else which is the reason I’ve been calling for coordinated activity across Europe to avoid any single company having to bear the burden of an industry restructuring which is European wide. Okay now you put your bloody finger on the bloody problem again and I'm not the guy who is supposed, is you wont know the opposition come from another country in a very consistent way about this being address. And I'm sitting here as the only Italian, as the only automaker in Italy representing a relatively seeable force across the European context.

The recent activity on the Co2 issue and the dominants of the German collision on Brazil tells you exactly where the power sits in running of this business across Europe. We have nothing to say. And I'm not going to be the facilitator of the strengthening of that – of that position out of Germany I will not be the guy. We will not be shutting down plants to facilitate the domination of the European car market for Germany I will not do it. And so we will shift our production capacity in accordance with our premium brand strategy and we will utilize what we have in defense of what we have. But unless Europe stands up and takes this issue and makes it its issue and makes it a European issue the solution is not going to really available and its not going to be available out of itself never.

My comments:

This stuff is absolutely fascinating to me.  I agree with what he is doing 100%. I may increase my position here after I re-review some fundamentals.
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on November 02, 2013, 03:22:23 PM
the call was great. i also added big to my Holdings.

also interesting was the short part about chrysler.

Alberto Villa - Intermonte
Thanks that’s helpful. The second one is just a curiosity the timing of your presentation of the forecast for the next five years many things might happen in the coming weeks and months with Chrysler stake eventually going public or not and so on. So I was wondering if that’s not I mean something that could impact your forecast that on the five year plan so if…

Sergio Marchionne - Chief Executive Officer
If you’re right there is one more justification to hold it at the end of Q1 of next year.
Alberto Villa - Intermonte
Okay.
Sergio Marchionne - Chief Executive Officer
By then all those smoke would have cleared.

so this sounds for me they buy chrysler till then. why would Sergio otherwise plans about a five year plan?

from now until q1 the will settle the chyrsler Thing and then start the engine

Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on November 04, 2013, 06:36:16 AM
http://www.youtube.com/user/dodge?feature=watch

the new dodge Durango 2014
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on November 04, 2013, 12:15:08 PM
http://blogs.wsj.com/moneybeat/2013/11/04/chrysler-adds-boa-merrill-lynch-to-underwrite-ipo/?mod=WSJ_hp_LEFTWhatsNewsCollection (http://blogs.wsj.com/moneybeat/2013/11/04/chrysler-adds-boa-merrill-lynch-to-underwrite-ipo/?mod=WSJ_hp_LEFTWhatsNewsCollection)


Chrysler Adds BofA Merrill Lynch to Underwrite IPO
Title: Re: FIATY - Fiat S.p.A.
Post by: Ian L on November 07, 2013, 06:34:26 AM
Euro rate cut to 0.25 and a weaker euro should help matters in Europe as well as Fiat's losses in Europe being lowered compared to profits elsewhere.
Title: Re: FIATY - Fiat S.p.A.
Post by: txlaw on November 18, 2013, 01:38:02 PM
Don't think these were posted:
http://www.freep.com/article/20131111/BUSINESS0103/311110075/1206/business01/2-Chrysler-execs-take-lead-roles-Maserati
http://www.freep.com/article/20131117/COL14/311170063/Mark-Phelan-Saad-Chehab-Chrysler-Maserati
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on November 18, 2013, 02:16:14 PM
Don't think these were posted:
http://www.freep.com/article/20131111/BUSINESS0103/311110075/1206/business01/2-Chrysler-execs-take-lead-roles-Maserati
http://www.freep.com/article/20131117/COL14/311170063/Mark-Phelan-Saad-Chehab-Chrysler-Maserati

sounds very good. i think in the next time we will see a Settlement between fiat and the veba
Title: Re: FIATY - Fiat S.p.A.
Post by: nikhil25 on November 20, 2013, 06:23:55 AM
Great reviews for Fiat 500E:
http://green.autoblog.com/2013/11/18/fiat-500e-named-road-and-tracks-best-electric-car-for-2013/
http://www.autoblog.com/2013/08/20/2013-fiat-500e-review/

Expansion mode in India:
http://www.business-standard.com/article/companies/jeep-dealerships-to-be-different-from-fiat-nagesh-basavanhalli-113111800750_1.html
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on November 20, 2013, 07:00:26 AM
Thanks!
Title: Re: FIATY - Fiat S.p.A.
Post by: nikhil25 on November 21, 2013, 08:12:55 AM
Fiat to expand production at China venture:
http://online.wsj.com/news/articles/SB10001424052702304337404579211373525376940
"John Burton, general manager of GAC Fiat Automobiles Co., said it would add a second shift at its plant in the city of Changsha starting in April 2014. Currently it has one eight-hour shift producing 32 cars per hour, he said.

The Italian company's venture is now in the process of hiring up to 800 mainly production-related staff to add to its current staff of 2,400, he said.

The increase comes as the company moves toward putting its Ottimo into full production next year with an eye toward entering Chinese showrooms in spring, after the Lunar New Year holiday, he said."

Fiat to build second model in China:
http://online.wsj.com/news/articles/SB10001424052702303653004579210102844379412
"MILAN--Italy's Fiat F.MI +1.12%  SpA plans to produce a second car in China as it looks to increase its presence in the world's biggest market, where its sales trail far behind those of its competitors, a person familiar with the matter said Wednesday.

Fiat will show the Ottimo at the Guangzhou motor show Thursday, according to a person. The hatchback is derived from the Viaggio sedan, which is the only other model that it builds in the country.

Despite the region's small contribution to Fiat's earnings, it is nevertheless more profitable than the Italian auto maker's traditional European market, where demand is stagnant due to the weak economy in the euro zone. In the first nine months of the year, the Asia-Pacific made 270 million euros ($364.87 million) in earnings before interest and taxes, or Ebit, compared with a loss of €304 million in Europe."

Title: Re: FIATY - Fiat S.p.A.
Post by: nikhil25 on November 21, 2013, 08:30:39 AM
Chrysler shooting for a December IPO:
http://finance.yahoo.com/news/chrysler-adds-four-underwriters-eyes-222847587.html
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on November 21, 2013, 01:05:11 PM
http://www.bloomberg.com/news/2013-11-21/chrysler-banks-said-to-weigh-ipo-valuation-of-about-10-billion.html
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on November 21, 2013, 01:36:34 PM
http://www.bloomberg.com/news/2013-11-21/chrysler-banks-said-to-weigh-ipo-valuation-of-about-10-billion.html

so at 10b. $ the stake from the uaw is only worth 4,2b$ that would be good for fiat.
i think the settle short before the ipo.
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on November 21, 2013, 01:53:59 PM
.
Title: Re: FIATY - Fiat S.p.A.
Post by: indirect on November 21, 2013, 01:59:55 PM
I agree that as soon as street valuation is done, Sergio will close the the deal, maybe before year end.

I predict that Fiat will pop 30%.
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on November 21, 2013, 02:02:25 PM
I agree that as soon as street valuation is done, Sergio will close the the deal, maybe before year end.

I predict that Fiat will pop 30%.

@indirect: i agree with you. i also think it will be Close before years end.
Title: Re: FIATY - Fiat S.p.A.
Post by: indirect on November 21, 2013, 02:04:31 PM
$4.1 would be saving ~$2 billion on the contractual cap, which would make this IPO process totally worth it! 
Title: Re: FIATY - Fiat S.p.A.
Post by: plato1976 on November 21, 2013, 03:02:12 PM
only 30% ?

I am counting on this baby to double for me

I agree that as soon as street valuation is done, Sergio will close the the deal, maybe before year end.

I predict that Fiat will pop 30%.
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on November 22, 2013, 07:56:29 AM
http://europe.autonews.com/article/20131122/ANE/311229994/fiat-seen-as-winner-with-chrysler-valued-at-10-billion#axzz2lODyKvje
Title: Re: FIATY - Fiat S.p.A.
Post by: Cunninghamew on November 22, 2013, 09:08:57 AM
This quote made me laugh:

Marchionne has offered the trust at least $1 billion less than what the labor group is asking, and said the UAW "should buy a ticket for the lottery" if it wants $5 billion or more.
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on November 22, 2013, 09:29:59 AM
I agree that as soon as street valuation is done, Sergio will close the the deal, maybe before year end.

I predict that Fiat will pop 30%.

@indirect: i agree with you. i also think it will be Close before years end.

Yeah. I added today. Now I have 23% instead of 13% in this baby. :)
Title: Re: FIATY - Fiat S.p.A.
Post by: arbcon on November 22, 2013, 09:42:57 AM
so the thesis of this investment is cost cuts coming out of Chrysler-Fiat will offset losses in Europe? Or, that spinoffs (Ferrari) will protect value? Brazil and Italy are still issues I'm wrestling with. How should we view this?
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on November 22, 2013, 09:45:56 AM
so the thesis of this investment is cost cuts coming out of Chrysler-Fiat will offset losses in Europe? Or, that spinoffs (Ferrari) will protect value? Brazil and Italy are still issues I'm wrestling with. How should we view this?

Ferrari is worth 5.5 per share on spin off. The rest is just a call option.
Actually, if you believe Chrysler is also worth more than 2.6 per share, Alfa and Maserati are just call options.
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on November 22, 2013, 10:35:38 AM
I agree that as soon as street valuation is done, Sergio will close the the deal, maybe before year end.

I predict that Fiat will pop 30%.

@indirect: i agree with you. i also think it will be Close before years end.

Yeah. I added today. Now I have 23% instead of 13% in this baby. :)

nice muscleman that you added today :)

the Company is today worth 10b.$ and have so much nice assets as muscleman mentioned. I love that.
way undervalued
Title: Re: FIATY - Fiat S.p.A.
Post by: LC on November 22, 2013, 10:46:44 AM
so the thesis of this investment is cost cuts coming out of Chrysler-Fiat will offset losses in Europe? Or, that spinoffs (Ferrari) will protect value? Brazil and Italy are still issues I'm wrestling with. How should we view this?

Ferrari is worth 5.5 per share on spin off. The rest is just a call option.
Actually, if you believe Chrysler is also worth more than 2.6 per share, Alfa and Maserati are just call options.

Generally how I view the situation as well. Bonus points for Brazilian capacity, any turnaround in Europe, etc.
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on November 22, 2013, 11:22:03 AM
I agree that as soon as street valuation is done, Sergio will close the the deal, maybe before year end.

I predict that Fiat will pop 30%.

@indirect: i agree with you. i also think it will be Close before years end.

Yeah. I added today. Now I have 23% instead of 13% in this baby. :)

nice muscleman that you added today :)

the Company is today worth 10b.$ and have so much nice assets as muscleman mentioned. I love that.
way undervalued

I also added this from 13% to 30% in my 401K plan.
Too bad that I am leaving current employer, and the new employer does not allow me to trade stocks in 401k. >:(
Title: Re: FIATY - Fiat S.p.A.
Post by: valueinvesting101 on November 22, 2013, 01:29:25 PM
May be you can rollover your old 401K to IRA instead of new employer's 401k. I believe you can do that.
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on November 22, 2013, 02:32:03 PM
May be you can rollover your old 401K to IRA instead of new employer's 401k. I believe you can do that.

Yeah I can. But for the new employer's 401k, I can only choose between a few mutual funds. :(
Title: Re: FIATY - Fiat S.p.A.
Post by: jch548 on November 23, 2013, 09:53:09 PM
Friday the WSJ had a story on Fiat's joint venture in China with Guangzhou Automobile Group. Their plant has a capacity to produce 140,000 cars per year. They only produced 11k autos in 2012 but should do 38k in 2013. They are currently producing the Viaggio sedan. They will be adding another shift in 2014 to begin producing the Ottimo hatchback. They also expect to have 170 dealerships by the end of 2014.

I need to look at their latest report to see how their other brands are doing in China. I'm sure they sell Ferrari in China but Mazerrati and Alpha? There should be a great deal of opportunity in China now the world's largest auto market. Sales are almost 20mm autos a year. They like luxury brands and an Italian brand could be very appealing to them. The Japanese had a 25% market share in China which has dropped to 15% due to negative sentiments toward Japan. That's 2mm auto sales a year the Japanese are missing. Fiat should be able to grab some of that.
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on November 25, 2013, 01:36:43 AM
http://online.wsj.com/news/articles/SB10001424052702304281004579218201897539412
Title: Re: FIATY - Fiat S.p.A.
Post by: Ian L on November 25, 2013, 05:18:55 AM
Chrysler ipo will not go ahead in 2013.

http://www.reuters.com/article/2013/11/25/us-fiat-chrysler-idUSBRE9AO0ER20131125?feedType=RSS&feedName=topNews&utm_source=dlvr.it&utm_medium=twitter&dlvrit=992637
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on November 25, 2013, 05:26:38 AM
Chrysler ipo will not go ahead in 2013.

http://www.reuters.com/article/2013/11/25/us-fiat-chrysler-idUSBRE9AO0ER20131125?feedType=RSS&feedName=topNews&utm_source=dlvr.it&utm_medium=twitter&dlvrit=992637

so we are Close to a Settlement? if there is no ipo in december ?
Title: Re: FIATY - Fiat S.p.A.
Post by: nikhil25 on November 25, 2013, 06:32:51 AM
On the contrary, wouldn't this be indicative of a delay in the settlement with VEBA? I can't see why they would delay the IPO process if a deal with VEBA was around the corner...
Title: Re: FIATY - Fiat S.p.A.
Post by: LC on November 25, 2013, 06:37:04 AM
On the contrary, wouldn't this be indicative of a delay in the settlement with VEBA? I can't see why they would delay the IPO process if a deal with VEBA was around the corner...

Well if they're firming up a deal finally, wouldn't they slow the IPO process in case they can finish the deal, then they wouldn't need to go through with the IPO?
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on November 25, 2013, 06:45:30 AM
On the contrary, wouldn't this be indicative of a delay in the settlement with VEBA? I can't see why they would delay the IPO process if a deal with VEBA was around the corner...

Well if they're firming up a deal finally, wouldn't they slow the IPO process in case they can finish the deal, then they wouldn't need to go through with the IPO?

my take is if the dont make a deal they would definitely go on with an ipo. now they stop the ipo process and this means for me, fiat make the VEBA clear that they dont get what they want with this ipo and they have to pay fees and etc.
so now the parties work on a Settlement maybe 4,2-4,4b.$ i guess and let this deal gone trough. the VEBA Needs Money and Marchionne now has the better Hands in this game
Title: Re: FIATY - Fiat S.p.A.
Post by: nikhil25 on November 25, 2013, 06:59:37 AM
On the contrary, wouldn't this be indicative of a delay in the settlement with VEBA? I can't see why they would delay the IPO process if a deal with VEBA was around the corner...

Well if they're firming up a deal finally, wouldn't they slow the IPO process in case they can finish the deal, then they wouldn't need to go through with the IPO?

my take is if the dont make a deal they would definitely go on with an ipo. now they stop the ipo process and this means for me, fiat make the VEBA clear that they dont get what they want with this ipo and they have to pay fees and etc.
so now the parties work on a Settlement maybe 4,2-4,4b.$ i guess and let this deal gone trough. the VEBA Needs Money and Marchionne now has the better Hands in this game

Both fair points. I'm just really surprised at the announcement given yesterday's article in WSJ about the company's plan to file in mid-December.
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on November 25, 2013, 07:04:40 AM
On the contrary, wouldn't this be indicative of a delay in the settlement with VEBA? I can't see why they would delay the IPO process if a deal with VEBA was around the corner...

Well if they're firming up a deal finally, wouldn't they slow the IPO process in case they can finish the deal, then they wouldn't need to go through with the IPO?

my take is if the dont make a deal they would definitely go on with an ipo. now they stop the ipo process and this means for me, fiat make the VEBA clear that they dont get what they want with this ipo and they have to pay fees and etc.
so now the parties work on a Settlement maybe 4,2-4,4b.$ i guess and let this deal gone trough. the VEBA Needs Money and Marchionne now has the better Hands in this game

Both fair points. I'm just really surprised at the announcement given yesterday's article in WSJ about the company's plan to file in mid-December.

yeah thats the Point i think. after the spread for the ipo was forecasted, in my opinion fiat talk to VEBA and says well your IPO is not going well, let us make a Settlement and not make this ipo that only produces cost and not fullfill your estimates
Title: Re: FIATY - Fiat S.p.A.
Post by: frommi on November 25, 2013, 07:09:24 AM
Hm perhaps its only because of winter holidays and the end of the year is near?  :)
Be happy, more time to pick up FIAT cheap.  ;)
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on November 25, 2013, 08:12:36 AM
from Fiat

"No assurance can be given as to whether or when an offering will be launched as any launch will be subject to market conditions and other relevant considerations"

http://online.wsj.com/news/articles/SB10001424052702304465604579219734238798424
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on November 25, 2013, 08:22:30 AM
On the contrary, wouldn't this be indicative of a delay in the settlement with VEBA? I can't see why they would delay the IPO process if a deal with VEBA was around the corner...

Well if they're firming up a deal finally, wouldn't they slow the IPO process in case they can finish the deal, then they wouldn't need to go through with the IPO?

my take is if the dont make a deal they would definitely go on with an ipo. now they stop the ipo process and this means for me, fiat make the VEBA clear that they dont get what they want with this ipo and they have to pay fees and etc.
so now the parties work on a Settlement maybe 4,2-4,4b.$ i guess and let this deal gone trough. the VEBA Needs Money and Marchionne now has the better Hands in this game

Both fair points. I'm just really surprised at the announcement given yesterday's article in WSJ about the company's plan to file in mid-December.

yeah thats the Point i think. after the spread for the ipo was forecasted, in my opinion fiat talk to VEBA and says well your IPO is not going well, let us make a Settlement and not make this ipo that only produces cost and not fullfill your estimates

I watched FIATY's bid/ask for a while this morning, and it is constantly like bid 6000/ask 1000, or bid 3000/ask 1000, and sometimes even bid 11000/ ask 1000.
I know most people on this board doesn't believe technical analysis like trend lines and momentum indicators, but doesn't the simple bid/ask numbers tell something?

Anyway, let's get back to fundamentals. Why would they say IPO is expected in mid-December, and then in less than 24 hours, it is suddenly not practical to do so anymore?
http://online.wsj.com/news/articles/SB10001424052702304281004579218201897539412
http://online.wsj.com/news/articles/SB10001424052702304465604579219734238798424

Let's just compare the time of these two articles. I think it is more likely to be negotiations wrangling instead of "market conditions".
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on November 25, 2013, 08:31:41 AM


Anyway, let's get back to fundamentals. Why would they say IPO is expected in mid-December, and then in less than 24 hours, it is suddenly not practical to do so anymore?

[/quote]

for me the only Explanation is, that fiat and the VEBA are saying ok lets talk and make a deal, instead of this IPO process. If the do the IPO it is clear the Fiat has the better Cards, so they work on a deal without the IPO.
Title: Re: FIATY - Fiat S.p.A.
Post by: hellsten on November 25, 2013, 08:32:56 AM
Added to FIATY today, which was already a large position. I'm betting Mohnish Pabrai and Guy Spier are right.
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on November 25, 2013, 08:34:39 AM
Added to FIATY today, which was already a large position. I'm betting Mohnish Pabrai and Guy Spier are right.

hellsten iam with you. Mohnish loves Fiat and i know it will work.  ;D

i have already 30% of my Portfolio in Fiat so i will watch it out  :)
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on November 25, 2013, 09:06:39 AM
Added to FIATY today, which was already a large position. I'm betting Mohnish Pabrai and Guy Spier are right.

hellsten iam with you. Mohnish loves Fiat and i know it will work.  ;D

i have already 30% of my Portfolio in Fiat so i will watch it out  :)

You are as crazy as I am!
I sold my EXOR positions and bought more fiaty, and now I have 30% in Fiaty too.
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on November 25, 2013, 09:13:05 AM
Added to FIATY today, which was already a large position. I'm betting Mohnish Pabrai and Guy Spier are right.

hellsten iam with you. Mohnish loves Fiat and i know it will work.  ;D

i have already 30% of my Portfolio in Fiat so i will watch it out  :)

You are as crazy as I am!
I sold my EXOR positions and bought more fiaty, and now I have 30% in Fiaty too.

good to found another Buddy who is crazy sometimes :). i think muscleman we are right. in two years we can see back. for me fiat is amazing cheap and the market and all of the "top" (not  ;D) Analysts dont see what is in this Company. for marchionne is a great Manager and leader. he Plays the game with the veba. say no to a high Settlement, they then want a ipo because the VEBA thinks they can generate 5b.$ and more. Marchionne said ok lets do it. Now after more clear indicators about a ipo come in, and the potential range for pricing, marchionne now has the better Cards. he knows that veba Need Money and very quickly. i think we will never see an ipo and they will settle before year end
Title: Re: FIATY - Fiat S.p.A.
Post by: nikhil25 on November 25, 2013, 01:44:30 PM
http://www.businessweek.com/news/2013-11-25/chrysler-ipo-said-delayed-to-2014-over-tax-confusion-in-u-dot-s-dot-1

"Chrysler Group LLC’s initial public offering was delayed after the automaker wasn’t able to resolve a routine tax issue quickly enough to complete the sale this year, three people with knowledge of the matter said.

Chrysler needs a letter from the U.S. Internal Revenue Service to clarify tax liabilities after the IPO and didn’t want to proceed without it, said the people, who asked not to be identified because the matter is private. An offering of union-held shares may be held in the first quarter, said Fiat, which owns 58.5 percent of the third-largest U.S. automaker.

Not Close
Fiat and a United Auto Workers retiree medical trust aren’t close to a deal that would give Fiat full ownership, two people said. Fiat, which took control of the U.S. automaker as part of its 2009 reorganization. The trust and Fiat are disputing Chrysler’s value as Marchionne seeks to buy the union fund’s 41.5 percent stake."
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on November 25, 2013, 03:04:56 PM
this fiat chrysler dealgame reminds me a lot to the MBIA/BAC litigation game. a lot of uncertainty, a lot of good articles, a lot of negative articles, stock up and down, and then one day boom +40%. it was great.

i trust Sergio marchionne and like it very much how he talks about the future, the brands , etc and lead the Company. it is not important if they settle this on dec 1 or dec 31 or jan 17 etc. the next years will be very bright for the fiat Group, i like the assets, the brands and the Chance to get a premium brand in the USA very cheap. Fiat will settle with the VEBA, i see no ipo.

I hold my Shares for the Long term
Title: Re: FIATY - Fiat S.p.A.
Post by: nikhil25 on November 25, 2013, 03:09:01 PM
this fiat chrysler dealgame reminds me a lot to the MBIA/BAC litigation game. a lot of uncertainty, a lot of good articles, a lot of negative articles, stock up and down, and then one day boom +40%. it was great.

i trust Sergio marchionne and like it very much how he talks about the future, the brands , etc and lead the Company. it is not important if they settle this on dec 1 or dec 31 or jan 17 etc. the next years will be very bright for the fiat Group, i like the assets, the brands and the Chance to get a premium brand in the USA very cheap. Fiat will settle with the VEBA, i see no ipo.

I hold my Shares for the Long term

Ditto. I think the delay/negotiation only adds some short-term volatility and I continue to stay optimistic from a long-term perspective.
Title: Re: FIATY - Fiat S.p.A.
Post by: racemize on November 25, 2013, 03:12:03 PM
Has anyone looked at Volkswagen?  They seem to be somewhat cheap (though not as cheap as FIAT) relative to Ford/GM and also have quite a few premium brands.
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on November 25, 2013, 03:28:48 PM
Quote
Fiat may have slipped into the driver’s seat. An autoworkers’ fund that owns 41.5 percent of Chrysler has been pushing for an initial public offering of the company as part of talks with its Italian partner. Chrysler’s board has decided to delay the stock sale until next year, suggesting Fiat’s negotiating position has improved.
 
The union probably needs Chrysler to be valued at $18 billion to make a listing worthwhile. Recent price talk has been somewhere around $9 billion to $12 billion, according to The Wall Street Journal. At the top of that range, the United Automobile Workers union fund would end up with $5 billion. That falls short of the $6 billion maximum, including interest, to which it is entitled as part of a 2009 post-bankruptcy agreement.


Fiat has already laid claim to almost a quarter of the trust’s holdings. Over the past year and a half, it has offered to buy from the union fund three separate 3.3 percent stakes. Remove that combined 10 percent holding, at $600 million, from the I.P.O. equation and the autoworkers’ trust fund would need Chrysler to be worth $17.2 billion to make a public listing for its remaining stake worthwhile — or $18 billion, after factoring in dividends it would no longer earn.
 
Pushing an equity offering into 2014 won’t obviously do much to improve the overall price new buyers would be willing to pay. Chrysler is predominantly a North America-focused company. That market has recovered well, with overall sales close to precrisis levels.
 
Much of the industry’s growth will probably come from Asia and a recovering Europe instead, where Chrysler has little presence. Its pretax margin should improve to 8 percent by 2015, from less than 5 percent, the company’s chief executive, Sergio Marchionne, said. That’s bound to be baked into assumptions already, though.
 
In addition, by January, Fiat will be able to make an offer on yet another 3.3 percent slug. Depending on how those deals are resolved, that would leave just 28 percent of the company available for the I.P.O., thus making it even harder for the trust to push for its desired valuation. A settlement with Fiat is increasingly looking like a better route.





In Delay of Chrysler I.P.O., Fiat May Have Gained Upper Hand



http://dealbook.nytimes.com/2013/11/25/in-delay-of-chrysler-i-p-o-fiat-may-have-gained-upper-hand/ (http://dealbook.nytimes.com/2013/11/25/in-delay-of-chrysler-i-p-o-fiat-may-have-gained-upper-hand/)
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on November 26, 2013, 01:42:45 AM
Quote
Fiat may have slipped into the driver’s seat. An autoworkers’ fund that owns 41.5 percent of Chrysler has been pushing for an initial public offering of the company as part of talks with its Italian partner. Chrysler’s board has decided to delay the stock sale until next year, suggesting Fiat’s negotiating position has improved.
 
The union probably needs Chrysler to be valued at $18 billion to make a listing worthwhile. Recent price talk has been somewhere around $9 billion to $12 billion, according to The Wall Street Journal. At the top of that range, the United Automobile Workers union fund would end up with $5 billion. That falls short of the $6 billion maximum, including interest, to which it is entitled as part of a 2009 post-bankruptcy agreement.


Fiat has already laid claim to almost a quarter of the trust’s holdings. Over the past year and a half, it has offered to buy from the union fund three separate 3.3 percent stakes. Remove that combined 10 percent holding, at $600 million, from the I.P.O. equation and the autoworkers’ trust fund would need Chrysler to be worth $17.2 billion to make a public listing for its remaining stake worthwhile — or $18 billion, after factoring in dividends it would no longer earn.
 
Pushing an equity offering into 2014 won’t obviously do much to improve the overall price new buyers would be willing to pay. Chrysler is predominantly a North America-focused company. That market has recovered well, with overall sales close to precrisis levels.
 
Much of the industry’s growth will probably come from Asia and a recovering Europe instead, where Chrysler has little presence. Its pretax margin should improve to 8 percent by 2015, from less than 5 percent, the company’s chief executive, Sergio Marchionne, said. That’s bound to be baked into assumptions already, though.
 
In addition, by January, Fiat will be able to make an offer on yet another 3.3 percent slug. Depending on how those deals are resolved, that would leave just 28 percent of the company available for the I.P.O., thus making it even harder for the trust to push for its desired valuation. A settlement with Fiat is increasingly looking like a better route.





In Delay of Chrysler I.P.O., Fiat May Have Gained Upper Hand



http://dealbook.nytimes.com/2013/11/25/in-delay-of-chrysler-i-p-o-fiat-may-have-gained-upper-hand/ (http://dealbook.nytimes.com/2013/11/25/in-delay-of-chrysler-i-p-o-fiat-may-have-gained-upper-hand/)

a Settlement with fiat is the best choice for the VEBA. They saw the probably Price range from 9-12b$ so they cant argue that in 3 months the Price range will be 15-18b$. it is nonsense. marchionne now it and Play the Cards.
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on November 26, 2013, 09:36:42 AM
Quote
Fiat's F.MI -1.04% U.S. journey has hit a roadblock. The Italian auto maker had planned an initial public offering of Chrysler Group LLC, in which it owns 58.5%, by year-end. But it said Monday the float would be delayed until the first quarter of next year.
 
Fiat and the United Auto Workers' voluntary employees' beneficiary association, or VEBA, which owns the rest of Chrysler, are effectively using the IPO process to settle their dispute over how much Fiat should pay for its stake.

But the delay may provide an opportunity: it's still in Fiat's interest to strike a deal before a float.
 
Both sides could lose should Chrysler actually float. Fiat has warned an IPO would prevent reaping the full benefits of the alliance, which covers areas like shared technology, global distribution and procurement. But the Italian company looks the worse off. A float could mean Fiat ultimately pays a higher price, should new minority investors demand a premium to sell. Chrysler is also stronger on a stand-alone basis than Fiat. The U.S. auto maker is expected to generate €753 million ($1.02 billion) in free cash flow this year, whereas a stand-alone Fiat would see a €1.73 billion cash outflow, estimates Barclays. BARC.LN +0.66%
 
Still, Fiat has allowed an IPO to proceed. That's despite improving investor sentiment around U.S. auto makers, making the VEBA's demands for $5 billion for its Chrysler stake seem more reasonable. It isn't clear what Fiat would pay. But its offer to exercise equity call options, now the subject of a court process, effectively valued the 41.5% Chrysler stake it doesn't already own at $3.18 billion, notes Bernstein Research.
 
A $5 billion price tag would value Chrysler roughly in line with General Motors Co. GM +0.32% It should arguably command a discount: Chrysler's turnaround is impressive but it is still a work in progress. The company's operating profit margin was 4.9% in the third quarter compared with 9.3% margins in GM's North American business. Besides, the VEBA has proposed to float just 16.6% of Chrysler when investors are generally wary of small minority stakes.
 
Both sides are well capable of digging in their heels. But there looks room for negotiation here yet.




http://online.wsj.com/news/articles/SB10001424052702304281004579221990542157958?mod=WSJ_Heard_LEFTTopNews (http://online.wsj.com/news/articles/SB10001424052702304281004579221990542157958?mod=WSJ_Heard_LEFTTopNews)
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on November 26, 2013, 10:08:44 AM
Fiat and VEBA will settle. it is the best outcome for all parties
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on November 26, 2013, 06:52:39 PM
Quote
Mr Marchionne may not have all the advantages: In this combined equity and credit
report we explore a number of potential scenarios regarding a Chrysler transaction,
following the VEBA’s instructions to Chrysler to commence an IPO process. The most
simplistic scenario involves a full Fiat-Chrysler merger, with no IPO transaction and no
capital increase. But we also pursue a scenario whereby a potential “Activist investor”
steps in to push an IPO through, thus postponing a full merger. Our third scenario
involves a full merger but financed in part by a capital increase. We look at the potential
impact on both Fiat’s equity and credit valuations under these scenarios, the potential
financing of the acquisition and the likely impact on credit ratings. Our base valuation
for the remaining 41.5% of Chrysler stands at cEUR 3.2bn (USD 4.3bn). Our calculated
maximum outflow under the terms of the Threshold and Equity Option Agreements is
EUR 3.91 (USD 5.1bn).


see attached
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on November 26, 2013, 11:34:53 PM
Quote
Mr Marchionne may not have all the advantages: In this combined equity and credit
report we explore a number of potential scenarios regarding a Chrysler transaction,
following the VEBA’s instructions to Chrysler to commence an IPO process. The most
simplistic scenario involves a full Fiat-Chrysler merger, with no IPO transaction and no
capital increase. But we also pursue a scenario whereby a potential “Activist investor”
steps in to push an IPO through, thus postponing a full merger. Our third scenario
involves a full merger but financed in part by a capital increase. We look at the potential
impact on both Fiat’s equity and credit valuations under these scenarios, the potential
financing of the acquisition and the likely impact on credit ratings. Our base valuation
for the remaining 41.5% of Chrysler stands at cEUR 3.2bn (USD 4.3bn). Our calculated
maximum outflow under the terms of the Threshold and Equity Option Agreements is
EUR 3.91 (USD 5.1bn).


see attached

The date is 17 October 2013. I thought it is something new. :)
Title: Re: FIATY - Fiat S.p.A.
Post by: hellsten on November 27, 2013, 12:13:25 AM
Quote
Mr Marchionne may not have all the advantages: In this combined equity and credit
report we explore a number of potential scenarios regarding a Chrysler transaction,
following the VEBA’s instructions to Chrysler to commence an IPO process. The most
simplistic scenario involves a full Fiat-Chrysler merger, with no IPO transaction and no
capital increase. But we also pursue a scenario whereby a potential “Activist investor”
steps in to push an IPO through, thus postponing a full merger. Our third scenario
involves a full merger but financed in part by a capital increase. We look at the potential
impact on both Fiat’s equity and credit valuations under these scenarios, the potential
financing of the acquisition and the likely impact on credit ratings. Our base valuation
for the remaining 41.5% of Chrysler stands at cEUR 3.2bn (USD 4.3bn). Our calculated
maximum outflow under the terms of the Threshold and Equity Option Agreements is
EUR 3.91 (USD 5.1bn).


see attached

Thanks.

Quote
Why Underweight? Fiat’s difficulties in its core business look unlikely to improve in 2013 and capacity takeout in Italy now seems unlikely given current plans. We believe full Chrysler ownership is unlikely in the near term, with uncertainty over whether the resources are available, and resolution of the VEBA situation still out of sight. We remain Underweight.

Funny how short their investment horizon is. Oh sorry, I forgot they're not investors…
Title: Re: FIATY - Fiat S.p.A.
Post by: skanjete on November 27, 2013, 12:50:16 AM
I really can't understand how they can produce a report of 77 pages and then conclude that Fiat is overvalued.
If you take their own valuation for Chrysler, and multiply with the 58,5% stake of Fiat, you already have a share price that's higher than the current share of Fiat.

According to the report, the value of the Fiat-ex Chrysler stake is less than zero??
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on November 27, 2013, 12:59:54 AM
I really can't understand how they can produce a report of 77 pages and then conclude that Fiat is overvalued.
If you take their own valuation for Chrysler, and multiply with the 58,5% stake of Fiat, you already have a share price that's higher than the current share of Fiat.

According to the report, the value of the Fiat-ex Chrysler stake is less than zero??

Quote
Mr Marchionne may not have all the advantages: In this combined equity and credit
report we explore a number of potential scenarios regarding a Chrysler transaction,
following the VEBA’s instructions to Chrysler to commence an IPO process. The most
simplistic scenario involves a full Fiat-Chrysler merger, with no IPO transaction and no
capital increase. But we also pursue a scenario whereby a potential “Activist investor”
steps in to push an IPO through, thus postponing a full merger. Our third scenario
involves a full merger but financed in part by a capital increase. We look at the potential
impact on both Fiat’s equity and credit valuations under these scenarios, the potential
financing of the acquisition and the likely impact on credit ratings. Our base valuation
for the remaining 41.5% of Chrysler stands at cEUR 3.2bn (USD 4.3bn). Our calculated
maximum outflow under the terms of the Threshold and Equity Option Agreements is
EUR 3.91 (USD 5.1bn).


see attached

Thanks.

Quote
Why Underweight? Fiat’s difficulties in its core business look unlikely to improve in 2013 and capacity takeout in Italy now seems unlikely given current plans. We believe full Chrysler ownership is unlikely in the near term, with uncertainty over whether the resources are available, and resolution of the VEBA situation still out of sight. We remain Underweight.

Funny how short their investment horizon is. Oh sorry, I forgot they're not investors…

it is very funny how they argue that fiat is overvalued. and because of fiat not own chrysler may the next 3months it is a absolutely sell.

Ferrari is worth nothing, you have to notice their best time is over.
Maserati is like Opel
And Fiat is also nothing worth.

HAHA. i love such articles. It was good for me that so much negativity was around, so that i can build my stake.
when Fiat owns Chrysler complet the start roaring the machine. Ferrari, Maserati, Alfa, Fiat and Chrysler. i love all the brands and if the can achieve almost the earning multiples from Ford or gm, the fiat Group is much undervalued. ferrari is alone worth 5,5€-6€ per share.

by the way. i remember when bac was 2 years ago at 5$ i put 30% into it. there was so much negative News, articles, opinions. it was amazing. such a Feeling, it was not normal. every day pure dramatic. and then a few months later bac rising higher and higher, and all the negative articles and analysts swing to more neutral or positive.
Title: Re: FIATY - Fiat S.p.A.
Post by: skanjete on November 27, 2013, 01:01:26 AM
In fact, everything about the report suggest that Fiat is undervalued.

The maximum that Fiat has to pay VEBA is 3,9€bn. The report values the same stake at anything between 3,9 and 7,8€bn. So if Sergio tomorrow pays the maximum, he instantly creates value of something between 0-3,9€bn, all according to the report.
Title: Re: FIATY - Fiat S.p.A.
Post by: jay21 on November 27, 2013, 09:05:41 AM
I think the worry in the report is a capital raise.

I just don't see it.  I would think they can even do some type of bridge financing to get the deal done and upstream some cash from Chrysler to pay off the debt or borrow at Chrysler to pay off some debt.  Anyone have a different view or any insight?
Title: Re: FIATY - Fiat S.p.A.
Post by: racemize on November 27, 2013, 09:12:50 AM
There's also the possibility that Exor helps out on it.  Not sure how feasible/likely that is though.
Title: Re: FIATY - Fiat S.p.A.
Post by: skanjete on November 27, 2013, 09:37:30 AM
Why not use the excess liquidity within Chrysler?

They can't do it immediately since they are limited by the covenants of the 2 bonds (19 and 21 I think) to extract the cash. But the report clearly states how that can be solved.

After refinancing the 2 bonds they could use the liquidity within Chrysler. Actually, the longer they wait, the higher the pressure on the VEBA (deadline is dec 14) to do a deal and the higher the liquidity in Chrysler that can be used to finance the deal.

Title: Re: FIATY - Fiat S.p.A.
Post by: racemize on November 27, 2013, 02:04:48 PM
On page 48 of the Barclays report, what does the other/eliminations and adjustment line items come from?  I don't see that explained.

I guess looking at that Sum of Parts, they value everything that isn't Chrysler at < 0 based on the debt.  Basically no improvements seem to be accounted for.

Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on December 02, 2013, 09:10:03 AM
Quote
Analyst Note 11/25/2013

Best Idea Fiat announced Monday that Chrysler Group's board "has determined that it will not be practicable for Chrysler Group to launch and complete an initial public offering prior to the end of 2013." In our opinion, the selling shareholder (United Auto Workers' voluntary employees' beneficiary association) was disappointed by the valuation it was given by the bankers and delayed the IPO. Our Fiat fair value estimate assumes that Fiat purchases all the remaining Chrysler equity held by the VEBA by the middle of 2014 at price of $4.2 billion, or about EUR 3.0 billion. To move our Fiat fair value estimate by EUR 1, the price for Chrysler would have to change by EUR 1.0 billion, or nearly $1.4 billion. If no-moat Fiat never buys the rest of Chrysler and we assume over our five-year forecast there are no dividends paid by Chrysler to its shareholders, our Fiat fair value estimate would be around EUR 9, representing about a 50% increase from the stock's current level.

We have estimated the value of the shares held by the UAW-managed Chrysler employee VEBA trust at about $4.2 billion. This values Chrysler's total equity at around $10.0 billion and the entire enterprise at roughly $22 billion. Last week, media reports quoted sources close to Chrysler as saying that the IPO price range would value Chrysler total equity at $9 billion-$16 billion, with the most likely outcome around $10 billion, directly in line with our valuation. The price range came after reports that the UAW had added four more bankers to the IPO underwriters, which we interpreted as meaning that demand among the original underwriters was not high enough. However, the UAW has publicly stated that it expected to get at least $5.0 billion for its stake, valuing the Chrysler equity at more than $12 billion. Further complicating the market for the UAW's stake, if the IPO had been launched during this quarter, it would have been competing with the U.S. Treasury's sale of General Motors shares.

Title: Re: FIATY - Fiat S.p.A.
Post by: LC on December 02, 2013, 09:14:29 AM
Thanks fareast
Title: Re: FIATY - Fiat S.p.A.
Post by: nikhil25 on December 02, 2013, 10:44:13 AM
Chrysler to introduce small Ram commercial van in North America
http://www.autoblog.com/2013/12/02/ram-promaster-city-fiat-doblo/
Title: Re: FIATY - Fiat S.p.A.
Post by: brker_guy on December 02, 2013, 09:53:46 PM

http://www.autonews.com/article/20131202/OEM01/312029919/marchionne-will-unveil-4th-relaunch-plan-for-struggling-alfa?cciid=email-autonews-daily&r=2994C8377578D8V#axzz2mO2CoudA

http://www.autonews.com/article/20131202/OEM01/312029918/alfas-revised-plan-focuses-on-new-rwd-awd-architecture?cciid=email-autonews-daily&r=2994C8377578D8V#axzz2mO2CoudA

Title: Re: FIATY - Fiat S.p.A.
Post by: skanjete on December 03, 2013, 05:20:57 AM
November was good for Chrysler :
http://finance.yahoo.com/news/chryslers-november-sales-rise-16-131205243.html
Title: Re: FIATY - Fiat S.p.A.
Post by: jay21 on December 03, 2013, 05:35:16 AM
November was good for Chrysler :
http://finance.yahoo.com/news/chryslers-november-sales-rise-16-131205243.html

A low content anecdote, but my two most memorable scenes in media that I have seen recently both involved Chrysler vehicles:

1. Walt buying new cars in Breaking Bad
2. The chase scene in Drive

I hope everyone else is seeing the new Chrysler cars as cool.
Title: Re: FIATY - Fiat S.p.A.
Post by: jch548 on December 03, 2013, 06:45:17 AM
Don't forget Koslowski in The Vanishing Point!
Title: Re: FIATY - Fiat S.p.A.
Post by: hellsten on December 03, 2013, 07:25:40 AM
Don't forget Koslowski in The Vanishing Point!

In Man of Steel a Sears store was destroyed by aliens. Maybe Lampert is sending us subtle hints about SHLD's future ;D
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on December 03, 2013, 08:51:18 AM
Hopefully the auto companies are not going back to their old ways...I also read another article about the loosening of financing...


Quote
Inventory climbed to almost 3.4 million cars and light trucks entering November, according to industry data provider WardsAuto. At 76 days’ supply, that was the highest for the month since 2005.




http://www.bloomberg.com/news/2013-12-02/most-autos-on-u-s-lots-since-05-has-ford-leading-cuts.html (http://www.bloomberg.com/news/2013-12-02/most-autos-on-u-s-lots-since-05-has-ford-leading-cuts.html)


Most Autos on U.S. Lots Since ’05 Has Ford Leading Cuts



Title: Re: FIATY - Fiat S.p.A.
Post by: brker_guy on December 04, 2013, 11:06:28 AM
Fiat Said Near Deal to Start Jeep SUV Production in China

http://www.bloomberg.com/news/2013-12-03/fiat-said-near-deal-to-make-jeeps-in-china-with-plant-compromise.html?cmpid=yhoo

Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on December 05, 2013, 09:29:34 AM
Add more?
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on December 05, 2013, 09:34:52 AM
Add more?

i would buy more, but have no Money left  >:( and already 30% in fiat.

cant understand why the Price Drops so much the last time.
Title: Re: FIATY - Fiat S.p.A.
Post by: luck on December 05, 2013, 09:48:08 AM
agree with you phil.  given cheapness (ev/ebitda), marchionne, catalysts, etc. = price movement in fiat is a bit bewildering.  however, even with pullback to $7.50, stock is still up 45+% on the year - so this might be normal price action from that angle.

also, there are some significant short players involved in the stocks (or at least were) - odey, chanos, and perhaps chris hohn of childrens if he hasn't covered.   i think some of their trades are pair trades, but there appears to be some conviction on the short side.  right now, looking into the bear case a bit more.  i might be guilty of focusing on confirming evidence, but chrysler seems to be doing quite well.

i have a 10% position in this and i'm also done buying (average cost mid-5), but wish i had not added in the 8's, so i could buy now.     :)
Title: Re: FIATY - Fiat S.p.A.
Post by: plato1976 on December 05, 2013, 10:08:40 AM
The price movement may not be bewildering
The market may simply fears that VEBA will be unreasonable and the IPO will happen

agree with you phil.  given cheapness (ev/ebitda), marchionne, catalysts, etc. = price movement in fiat is a bit bewildering.  however, even with pullback to $7.50, stock is still up 45+% on the year - so this might be normal price action from that angle.

also, there are some significant short players involved in the stocks (or at least were) - odey, chanos, and perhaps chris hohn of childrens if he hasn't covered.   i think some of their trades are pair trades, but there appears to be some conviction on the short side.  right now, looking into the bear case a bit more.  i might be guilty of focusing on confirming evidence, but chrysler seems to be doing quite well.

i have a 10% position in this and i'm also done buying (average cost mid-5), but wish i had not added in the 8's, so i could buy now.     :)
Title: Re: FIATY - Fiat S.p.A.
Post by: LC on December 05, 2013, 10:58:02 AM
IMHO it is due to uncertainty regarding Chrysler.
Title: Re: FIATY - Fiat S.p.A.
Post by: krazeenyc on December 05, 2013, 11:06:47 AM
Imagine if the market were always logical -- you'd make almost no money at all -- unless you were the genius who saw it first.
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on December 05, 2013, 11:08:26 AM
IMHO it is due to uncertainty regarding Chrysler.

thats right LC. but i think it is too much. the Price drop is too much. the stock is down from 6,5€ to 5,43€ in a very short time. the movement with the VEBA is definetly going into fiats favor so this Price down movement is too much for my opinion.
Title: Re: FIATY - Fiat S.p.A.
Post by: merkhet on December 05, 2013, 01:36:42 PM

Imagine if the market were always logical -- you'd make almost no money at all -- unless you were the genius who saw it first.


+1
Title: Re: FIATY - Fiat S.p.A.
Post by: hardincap on December 05, 2013, 01:40:23 PM

Imagine if the market were always logical -- you'd make almost no money at all -- unless you were the genius who saw it first.


+1

i was thinking of posting exact same response, and you beat me to it.
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on December 05, 2013, 01:41:23 PM
Add more?

i would buy more, but have no Money left  >:( and already 30% in fiat.

cant understand why the Price Drops so much the last time.


I think it is because of short sellers. My shares sit in my account in IB until 12/2 when it started to get all lent out.
Title: Re: FIATY - Fiat S.p.A.
Post by: hardcorevalue on December 05, 2013, 02:38:09 PM
This is a big position for me. I keep running through my thesis as the stock is tanking. I see the biggest risk as not closing the chrysler deal, but believe it gets done fairly soon, in Fiat's favour. I'm concerned about Alfa Romeo's plans in North America, the brand is completely unknown here and will consume a lot of capex just to get going. Sergio has struggled with Alfa for years as the above article showed.

But overall this looks very cheap to me. I'm running my valuation on an adjusted EV/EBTIDA basis against GM and Ford. Because of the leverage, its not hard to imagine the equity increasing significantly from these levels as the stock becomes more understandable to investors, Guy Spiers has talked about this 'misunderstood' aspect before regarding Fiat. And there's always the chance Sergio brings Fiat-Chrysler to an industry leader based on simplified architecture across their global brands and improved capacity usage in their factories.

Wait and see i Guess!

Cheers
Title: Re: FIATY - Fiat S.p.A.
Post by: buylowersellhigh on December 05, 2013, 03:13:51 PM
Can you explain, "Because of the leverage, its not hard to imagine the equity increasing significantly from these levels..."

What has Guy Spiers said about this?

TIA
Title: Re: FIATY - Fiat S.p.A.
Post by: hardcorevalue on December 05, 2013, 03:23:33 PM
Can you explain, "Because of the leverage, its not hard to imagine the equity increasing significantly from these levels..."

What has Guy Spiers said about this?

TIA

Guy hasn't talked about the leverage but just the perception of the company.

When a leveraged company gets reweighted to a higher EV/EBITDA multiple, the equity will increase by a greater rate. Of course the opposite will be true if it falls apart. The equity is magnified by the high debt levels.
Title: Re: FIATY - Fiat S.p.A.
Post by: claphands22 on December 06, 2013, 01:45:26 AM
Anyone who took a significant position -- I wonder how you got comfortable with the dilution risk.   Both Chris Hohn and Jim Chanos have publicly said Fiat was a short idea due to dilution risk. Smart guys who probably have smart analysts working under them. Other than Marchionne saying he won't dilute -- what was your analysis that Fiat will not dilute or at least the fears of dilution are too excessive?

Assuming they are short just because it is a pair trade seems to light on analysis.
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on December 06, 2013, 01:53:58 AM
Anyone who took a significant position -- I wonder how you got comfortable with the dilution risk.   Both Chris Hohn and Jim Chanos have publicly said Fiat was a short idea due to dilution risk. Smart guys who probably have smart analysts working under them. Other than Marchionne saying he won't dilute -- what was your analysis that Fiat will not dilute or at least the fears of dilution are too excessive?

Assuming they are short just because it is a pair trade seems to light on analysis.


for me there would be a big Dilution risk, if fiat have to pay a big premium to the veba. but i think the last Actions and what we hear from Banks and so on, let me assume that fiat will be paying a lot less than anticipated. and with a lower Price all the risks are very low. for me all this is short term volatility. nothing more. stock Price down another 2% today. it is more Panic than reasoned.
Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on December 06, 2013, 02:08:19 AM
Anyone who took a significant position -- I wonder how you got comfortable with the dilution risk.   Both Chris Hohn and Jim Chanos have publicly said Fiat was a short idea due to dilution risk. Smart guys who probably have smart analysts working under them. Other than Marchionne saying he won't dilute -- what was your analysis that Fiat will not dilute or at least the fears of dilution are too excessive?

Assuming they are short just because it is a pair trade seems to light on analysis.


for me there would be a big Dilution risk, if fiat have to pay a big premium to the veba. but i think the last Actions and what we hear from Banks and so on, let me assume that fiat will be paying a lot less than anticipated. and with a lower Price all the risks are very low. for me all this is short term volatility. nothing more. stock Price down another 2% today. it is more Panic than reasoned.

If they decide to raise money with new equity, it will most likely be done by a rights offering to existing shareholders, f.e. like Exor did with Juventus.
Title: Re: FIATY - Fiat S.p.A.
Post by: jay21 on December 06, 2013, 05:58:33 AM
 One of the biggest success stories in exports has been Chrysler’s rugged line of Jeep sport utility vehicles.

On any given day, the assembly line at Chrysler’s Jefferson North assembly plant in Detroit churns out Jeep Grand Cherokees destined for sale in more than 120 countries.

Global sales of Jeep vehicles increased 19 percent in 2012 over the year earlier, according to Commerce Department statistics. And Chrysler is investing $500 million in its Toledo, Ohio, plant for the new Jeep Cherokee — partly to accommodate the expected demand for the vehicles outside the United States.

http://www.nytimes.com/2013/12/06/business/on-the-worlds-roads-more-american-wheels.html?pagewanted=1&_r=0&partner=yahoofinance
Title: Re: FIATY - Fiat S.p.A.
Post by: merkhet on December 06, 2013, 12:45:31 PM
I think the big risk people are worried about is a combination of the following:

(1) Fiat doesn't find a way to buy the rest of Chrysler
(2) Fiat's situation in Europe gets worse

I think that this is unlikely, but it's probably the cause for the pullback in the last few months.
Title: Re: FIATY - Fiat S.p.A.
Post by: PLynchJr on December 09, 2013, 07:10:08 AM
Nice.  Every 1.4 million dollar LaFerrari sold out. 

http://www.autoblog.com/2013/12/09/laferrari-sold-out-report/
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on December 09, 2013, 07:26:34 AM
Nice.  Every 1.4 million dollar LaFerrari sold out. 

http://www.autoblog.com/2013/12/09/laferrari-sold-out-report/

thanks for the link. amazing!! so almost 700mio $ Revenue with this few cars  :o
Title: Re: FIATY - Fiat S.p.A.
Post by: txlaw on December 09, 2013, 08:38:50 AM
Fiat said to invest $12 billion to help end Europe losses, revive Italian plants:

http://www.autonews.com/article/20131209/COPY01/312099904/fiat-said-to-invest-12-billion-to-help-end-europe-losses-revive
Title: Re: FIATY - Fiat S.p.A.
Post by: frommi on December 09, 2013, 09:46:55 AM
Perhaps i am stupid, but why don`t they kill the old business and focus on Ferrari/Maserati/Chrysler?
They have lost vs. Volkswagen/KIA and should simply agree this fact and act accordingly.
Rename the stock after that to Ferrari or spin the good parts off would be great for stockholders in my eyes.

But its possible that i have simply no clue.  ;D


Title: Re: FIATY - Fiat S.p.A.
Post by: buylowersellhigh on December 09, 2013, 02:51:44 PM
Fiat said to invest $12 billion to help end Europe losses, revive Italian plants:

http://www.autonews.com/article/20131209/COPY01/312099904/fiat-said-to-invest-12-billion-to-help-end-europe-losses-revive

Wasn't the whole point of investment thesis is this isn't really an European-centric play?  Now they will have to deal with the Italian government and unions.  What has really changed?  Couldn't the same production be done in Brazil?
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on December 09, 2013, 03:08:53 PM
http://www.businessweek.com/articles/2013-12-09/fiat-looks-to-maseratis-jeeps-and-the-cute-little-500-for-a-jumpstart#r=nav-r-story (http://www.businessweek.com/articles/2013-12-09/fiat-looks-to-maseratis-jeeps-and-the-cute-little-500-for-a-jumpstart#r=nav-r-story)

Fiat Looks to Maseratis, Jeeps, and the Cute Little 500 for a Jump-Start
Title: Re: FIATY - Fiat S.p.A.
Post by: jch548 on December 09, 2013, 09:24:56 PM
Six months ago Sergio was threatening to move Fiat's HQ to Detroit. Now it seems he doesn't want to close any capacity in Italy something about who ever closes capacity first will lose market share. Fiat has the most excess capacity of any of Europe's auto makers by a long shot. I don't understand the argument. One of the French companies announced last month they are closing some capacity. How do you lose market share or get under cut when unused capacity goes away and your fixed costs drop?
Title: Re: FIATY - Fiat S.p.A.
Post by: hardcorevalue on December 09, 2013, 09:43:09 PM
Six months ago Sergio was threatening to move Fiat's HQ to Detroit. Now it seems he doesn't want to close any capacity in Italy something about who ever closes capacity first will lose market share. Fiat has the most excess capacity of any of Europe's auto makers by a long shot. I don't understand the argument. One of the French companies announced last month they are closing some capacity. How do you lose market share or get under cut when unused capacity goes away and your fixed costs drop?

I think the argument is the first one to blink, loses the upside on the operating leverage. I see your point though, Sergio has seemed to double down on Italy recently.

Title: Re: FIATY - Fiat S.p.A.
Post by: skanjete on December 09, 2013, 11:59:45 PM
Six months ago Sergio was threatening to move Fiat's HQ to Detroit. Now it seems he doesn't want to close any capacity in Italy something about who ever closes capacity first will lose market share. Fiat has the most excess capacity of any of Europe's auto makers by a long shot. I don't understand the argument. One of the French companies announced last month they are closing some capacity. How do you lose market share or get under cut when unused capacity goes away and your fixed costs drop?

I think the argument is the first one to blink, loses the upside on the operating leverage. I see your point though, Sergio has seemed to double down on Italy recently.

Sergio is executing exactly as he communicated before. He doesn't want to close capacity in Italy because it would benefit competitors more than it would benefit Fiat.
Instead he wants to use the unused capacity to produce Maserati's and Alfa Romeo's for the export markets.
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on December 10, 2013, 09:18:05 AM
Six months ago Sergio was threatening to move Fiat's HQ to Detroit. Now it seems he doesn't want to close any capacity in Italy something about who ever closes capacity first will lose market share. Fiat has the most excess capacity of any of Europe's auto makers by a long shot. I don't understand the argument. One of the French companies announced last month they are closing some capacity. How do you lose market share or get under cut when unused capacity goes away and your fixed costs drop?

If the Chrysler deal falls apart, he could just sell all Chrysler shares and don't move HQ.
I think he is preparing for that. By heavily investing in Italy, he can have alternative options.
Title: Re: FIATY - Fiat S.p.A.
Post by: nikhil25 on December 11, 2013, 06:59:42 AM
Jenkins: The U.S. Bailout of Fiat
How a troubled Italian auto maker became a beneficiary of Obama's zany fuel-economy targets.
http://online.wsj.com/news/articles/SB10001424052702304014504579250242537507118
Title: Re: FIATY - Fiat S.p.A.
Post by: jch548 on December 11, 2013, 07:35:19 AM
Keeping all the capacity in Italy Sergio has to be thinking out about five years and betting the Alpha Romeo export model will be a homerun. U.S. based capacity is still cheaper than Europe so he has to export upscale autos. Might be kind of a stretch but if it works and the Chrysler merger happens I could see Fiat multi bagging. Been reading U.S. auto sales should be very healthy the next three to four years so its a decent time to roll the dice.
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on December 11, 2013, 07:37:44 AM
Keeping all the capacity in Italy Sergio has to be thinking out about five years and betting the Alpha Romeo export model will be a homerun. U.S. based capacity is still cheaper than Europe so he has to export upscale autos. Might be kind of a stretch but if it works and the Chrysler merger happens I could see Fiat multi bagging. Been reading U.S. auto sales should be very healthy the next three to four years so its a decent time to roll the dice.

+1 i have the absolutely same Feeling as you jch548
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on December 12, 2013, 11:16:04 AM
Failed Talks and an Italian Wedding

http://www.bloomberg.com/news/2013-12-12/failed-talks-and-an-italian-wedding.html (http://www.bloomberg.com/news/2013-12-12/failed-talks-and-an-italian-wedding.html)


this a part of series of articles on detriot/carmakers/workers.
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on December 12, 2013, 11:58:03 AM
http://online.wsj.com/news/articles/SB10001424052702304014504579250242537507118?mod=WSJ_qtoverview_wsjlatest (http://online.wsj.com/news/articles/SB10001424052702304014504579250242537507118?mod=WSJ_qtoverview_wsjlatest)

The U.S. Bailout of Fiat

How a troubled Italian auto maker became a beneficiary of Obama's zany fuel-economy targets.

This is posted by nikhil25 yesterday :)
Title: Re: FIATY - Fiat S.p.A.
Post by: brker_guy on December 12, 2013, 11:16:06 PM
Nice video about Chrysler Jeep Plant in Detroit.  I have to say.  I worked in Detroit for a few months last year, and it was sad to see the place.  But the people there work very hard.  It's the UAW who really ran the place down.

http://www.bloomberg.com/video/how-chrysler-saved-the-last-auto-plant-in-detroit-Lw~SXy~_THWdvXCoxpCYWQ.html

Title: Re: FIATY - Fiat S.p.A.
Post by: brker_guy on December 13, 2013, 02:15:29 PM
The all-new 2015 Chrysler 200 spy shots:

http://www.autonews.com/apps/pbcs.dll/gallery?Site=CA&Date=20131213&Category=PHOTOS01&ArtNo=121309999&Ref=PH&Params=Itemnr=1#axzz2nOarBzWZ
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on December 13, 2013, 02:42:02 PM
The all-new 2015 Chrysler 200 spy shots:

http://www.autonews.com/apps/pbcs.dll/gallery?Site=CA&Date=20131213&Category=PHOTOS01&ArtNo=121309999&Ref=PH&Params=Itemnr=1#axzz2nOarBzWZ

Looks nice   :)
Title: Re: FIATY - Fiat S.p.A.
Post by: Ian L on December 13, 2013, 03:31:15 PM
I dont understand how they can afford to spend 12 billion in Italy, but dont want to pay up an extra billion for the rest of Chrysler. How can there be so little flexibility on Chrysler, which is profit making but ready to make such a huge investment in Italy, which is still losing.
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on December 15, 2013, 05:32:59 PM
It is coming to year end, does any one know if there will be an ADR fee to hit my account soon?
If yes, will there be a way to avoid it? I know that in IB, I should be able to convert my FIATY into F:MI on the Italian exchange.
I looked at this link but don't quite understand how it works.
https://www.adr.db.com/drweb/dr_details.html?identifier=606&identifierType=DRID
Title: Re: FIATY - Fiat S.p.A.
Post by: racemize on December 15, 2013, 05:57:33 PM
It is coming to year end, does any one know if there will be an ADR fee to hit my account soon?
If yes, will there be a way to avoid it? I know that in IB, I should be able to convert my FIATY into F:MI on the Italian exchange.
I looked at this link but don't quite understand how it works.
https://www.adr.db.com/drweb/dr_details.html?identifier=606&identifierType=DRID

Wait, there are fees for ADRs?  I was not aware of that.

If that is the case, why not just invest directly in the underlying?
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on December 15, 2013, 06:09:10 PM
Quote
If you are an ADR investor, you may already know that banks that custody ADRs (ADR agents) are allowed to charge custody fees. The amount and timing of custody fees are detailed in your ADR prospectus.

In the past, ADR agents could collect custody fees only when they were able to subtract them from ADR dividends. Since many ADRs do not pay regular dividends, agents were often unable to collect their fees.

New fee-collection method approved by SEC
Last year, the Depository Trust Company (DTC) received SEC approval to start collecting custody fees on behalf of ADR agents for ADRs that do not pay periodic dividends. To collect the fees owed by ADR investors, the DTC has started charging companies like Schwab that hold ADRs for their clients. Fees charged to Schwab by the DTC are referred to as “ADR pass-through fees.”

What this means for ADR investors

ADR fees normally average from one to three cents per share. Fee amounts and timing differ by ADR. See your ADR prospectus for specific information. Search for it online with EDGAR Company Search.
Fees collected from Schwab by the DTC will be automatically passed through to you. They will be deducted from your Schwab account and shown on your monthly statements. See sample statement.
Pass-through fees are deducted from your account for your ADRs that do not pay dividends. For dividend-paying ADRs, agents will deduct their fees from your dividends as they have in the past. Going forward, both types of ADR fees will be identified on your statement as “ADR Pass Thru Fee.”


http://www.schwab.com/public/schwab/nn/m/q207/adr.html
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on December 16, 2013, 11:14:09 AM
It is coming to year end, does any one know if there will be an ADR fee to hit my account soon?
If yes, will there be a way to avoid it? I know that in IB, I should be able to convert my FIATY into F:MI on the Italian exchange.
I looked at this link but don't quite understand how it works.
https://www.adr.db.com/drweb/dr_details.html?identifier=606&identifierType=DRID

Wait, there are fees for ADRs?  I was not aware of that.

If that is the case, why not just invest directly in the underlying?

Exactly. I am going to call my broker tonight to get my FIATY converted to the underlying.
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on December 16, 2013, 12:16:37 PM
http://europe.autonews.com/article/20131216/ANE/312169933/tight-race-for-top-job-at-fiat-chrysler#axzz2ndbVGfvU
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on December 16, 2013, 01:10:51 PM
Quote
If you are an ADR investor, you may already know that banks that custody ADRs (ADR agents) are allowed to charge custody fees. The amount and timing of custody fees are detailed in your ADR prospectus.

In the past, ADR agents could collect custody fees only when they were able to subtract them from ADR dividends. Since many ADRs do not pay regular dividends, agents were often unable to collect their fees.

New fee-collection method approved by SEC
Last year, the Depository Trust Company (DTC) received SEC approval to start collecting custody fees on behalf of ADR agents for ADRs that do not pay periodic dividends. To collect the fees owed by ADR investors, the DTC has started charging companies like Schwab that hold ADRs for their clients. Fees charged to Schwab by the DTC are referred to as “ADR pass-through fees.”

What this means for ADR investors

ADR fees normally average from one to three cents per share. Fee amounts and timing differ by ADR. See your ADR prospectus for specific information. Search for it online with EDGAR Company Search.
Fees collected from Schwab by the DTC will be automatically passed through to you. They will be deducted from your Schwab account and shown on your monthly statements. See sample statement.
Pass-through fees are deducted from your account for your ADRs that do not pay dividends. For dividend-paying ADRs, agents will deduct their fees from your dividends as they have in the past. Going forward, both types of ADR fees will be identified on your statement as “ADR Pass Thru Fee.”


http://www.schwab.com/public/schwab/nn/m/q207/adr.html

Each ADR is different. I just called Deusche Bank ADR department, and they said FIATY does not get charged ADR fees unless there is a cash dividend, so I think it is good. :)
Title: Re: FIATY - Fiat S.p.A.
Post by: jay21 on December 17, 2013, 12:44:56 PM
UAW wants to eliminate two-tier wage system: official

http://finance.yahoo.com/news/uaw-wants-eliminate-two-tier-171028554.html

Thought this was interesting:

"UAW membership sunk to 355,191 in 2009 at the depths of the U.S. recession but while U.S. auto sales have increased nearly 50 percent since then, union membership has risen 8 percent."
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on December 17, 2013, 12:47:02 PM
Quote
Pay of hourly workers at the entry level starts at just under $16 an hour and rises over time to more than $19. Veteran workers are paid just more than $28 an hour.


About 16 percent of GM's 51,500 hourly U.S. employees are second-tier workers, while 19 percent of Ford's 46,500 hourly workers are paid at that level. About a quarter of Chrysler's 32,000 hourly workers are entry-level.

Title: Re: FIATY - Fiat S.p.A.
Post by: brker_guy on December 17, 2013, 04:24:20 PM
Quote
Fiat 500e motor makes Wards 10 Best engine list, 2nd-ever EV awarded

http://green.autoblog.com/2013/12/16/fiat-500e-motor-wards-10-best-engine-list-2014/?ncid=txtlnkusaolp00000588

http://wardsauto.com/ward039s-10-best-engines/fiat-500e-test-drive-wards-10-best-engines-2014

http://wardsauto.com/ward039s-10-best-engines/diesels-turbos-dominate-2014-ward-s-10-best-engines

Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on December 17, 2013, 09:06:18 PM
http://www.bloomberg.com/news/2013-12-18/u-s-auto-revival-boosts-shipping-as-jeeps-go-to-china-freight.html (http://www.bloomberg.com/news/2013-12-18/u-s-auto-revival-boosts-shipping-as-jeeps-go-to-china-freight.html)

U.S. Auto Revival Boosts Shipping as Jeeps Go to China
Title: Re: FIATY - Fiat S.p.A.
Post by: frommi on December 19, 2013, 11:38:47 AM
Has anybody thought about what could go wrong with FIAT and what this means for the stock?

I allways think about buying FIAT, but i can`t pull the trigger because it has no downside protection and there is a lot of shit that can happen especially when this all-or-nothing move with Alfa Romeo goes wrong. Or perhaps Chrysler is at the top of its cycle and reverts now. (Ford revenue forecast a first sign?)

So has somebody evidence that we are not at the cycle top for Chrysler or is there a downside protection i don`t see?
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on December 19, 2013, 11:46:54 AM
Has anybody thought about what could go wrong with FIAT and what this means for the stock?

I allways think about buying FIAT, but i can`t pull the trigger because it has no downside protection and there is a lot of shit that can happen especially when this all-or-nothing move with Alfa Romeo goes wrong. Or perhaps Chrysler is at the top of its cycle and reverts now. (Ford revenue forecast a first sign?)

So has somebody evidence that we are not at the cycle top for Chrysler or is there a downside protection i don`t see?

the first and best downside protection is ferrari. one of the best brands in the world. everybody (vw etc.) would love to buy it. ferrari is almost worth all the current market cap.

i can sleep well  :)
Title: Re: FIATY - Fiat S.p.A.
Post by: frommi on December 19, 2013, 11:57:36 AM
the first and best downside protection is ferrari. one of the best brands in the world. everybody (vw etc.) would love to buy it. ferrari is almost worth all the current market cap.

i can sleep well  :)

In the pdf of the introductory post Ferrari is valued at 2 billion. That won`t move the needle with an EV of 48 billion. FIAT is highly levered, when there is a liquidation the only ones who potentially get something back are the creditors.

If i am wrong please tell me with numbers and facts.  :)
Title: Re: FIATY - Fiat S.p.A.
Post by: jay21 on December 19, 2013, 12:10:52 PM
Spin offs of Ferrari, Maserati, and Chrysler provide some downside protection.  The launch of Alfa is the only thing that worries me because I don't really have a basis of evaluation and I probably should read more on it.

I do think there are some things that can go wrong here, but if only 1 or 2 of the many things that can go right do go right, I see myself making a lot of money. 
Title: Re: FIATY - Fiat S.p.A.
Post by: LC on December 19, 2013, 12:21:26 PM
Lot of free call options...brazil, chrysler, maserati, alfa...IMHO ferrari+chrysler alone is worth more than the current price.

There was another PDF from DB i think somewhere in this thread with a general comparison of the auto market. Fiat trades at the lowest or second lowest EBITDA multiple.

Where is the downside coming from? Europe is already in the fits and has overcapacity issues...an Alfa disaster isn't going to change much there. If Chrysler is at the top of the cycle now (along with other US manufacturers), Fiat's share price has barely reflected it. Maybe it goes down from $7.50->6.50, but then again maybe it can acquire the rest of Chrysler at a cheaper multiple.

I see much more upside than downside, combined with great brands, combined with a share price trading at the lowest multiple among peers.
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on December 19, 2013, 12:38:06 PM
Lot of free call options...brazil, chrysler, maserati, alfa...IMHO ferrari+chrysler alone is worth more than the current price.

There was another PDF from DB i think somewhere in this thread with a general comparison of the auto market. Fiat trades at the lowest or second lowest EBITDA multiple.

Where is the downside coming from? Europe is already in the fits and has overcapacity issues...an Alfa disaster isn't going to change much there. If Chrysler is at the top of the cycle now (along with other US manufacturers), Fiat's share price has barely reflected it. Maybe it goes down from $7.50->6.50, but then again maybe it can acquire the rest of Chrysler at a cheaper multiple.

I see much more upside than downside, combined with great brands, combined with a share price trading at the lowest multiple among peers.

Spin offs of Ferrari, Maserati, and Chrysler provide some downside protection.  The launch of Alfa is the only thing that worries me because I don't really have a basis of evaluation and I probably should read more on it.

I do think there are some things that can go wrong here, but if only 1 or 2 of the many things that can go right do go right, I see myself making a lot of money. 

absolutely. i share both your opinions. the upside is way higher than the downside. alone the wonderful brands ala chrysler, ferrari and maserati are worth much more then the current market cap.
in the us we have a good Situation. the automakers coming back and we have a lot of old cars on the streets. i think the average is that the cars are 11-12years old. so a lot of new demand. chrysler makes good cars, nice Jeeps and so on. the valuation is so low. it is crazy that tesla was double the value from fiat, short time ago. i love my stake in fiat and think it will ride the next years very very very nice.  :) :)
Title: Re: FIATY - Fiat S.p.A.
Post by: goldfinger on December 19, 2013, 10:21:49 PM
Quote
In the pdf of the introductory post Ferrari is valued at 2 billion. That won`t move the needle with an EV of 48 billion. FIAT is highly levered, when there is a liquidation the only ones who potentially get something back are the creditors.

Didn't greenwood investors find out that they kept debt unsecured and can divest Ferrari and Chrysler stakes to shareholders whenever they want?
Title: Re: FIATY - Fiat S.p.A.
Post by: goldfinger on December 19, 2013, 10:33:56 PM
Quote
Fiat SpA (F IM) represents a rare investment opportunity- one of the few outliers that an investor gets in his career.  In a nutshell, it essentially has about 5x the upside that highly-favored GM has, with less downside risk.  How could this be, since Fiat has industrial net debt as opposed to GM’s industrial net cash position?  The Agnelli Family and venerable CEO Sergio Marchionne (history of turning around SGS SA, Fiat Industrial, Fiat in 2004, and of course Chrysler) have purposefully kept Fiat’s debt structure totally unsecured, with the ability to sell or distribute assets freely.  Last summer, as Italian bond yields were blowing out and there was doubt in the markets as to whether Italy would remain in the eurozone, the company spoke of its plan in a nightmare European scenario, whereby the highly profitable South American operations of Fiat could be sold to Chrysler and European operations simply shut-down to stop the bleeding.  A distribution of Ferrari stock is not restricted by Fiat’s bond indentures, and has been discussed as likely after the merger between Chrysler and Fiat.

Quote
If one were to ignore the economic nature of the company and value Ferrari using a similar metric to other auto manufacturers, it would be worth ~€ 2.4 billion, however due to the durable and sustainable competitive advantage that Ferrari enjoys, it would be more appropriate to value it similarly to a luxury brand at 9x-10x EBIT. Such multiple would put Ferrari’s value at €3.15bil – € 3.5 bil.
To confirm this valuation, Mubadala Development Company sold a 5% stake in Ferrari back to Fiat SpA at € 122 million in 2010 (at roughly 9x ttm EBIT).
Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on December 20, 2013, 01:13:06 AM
Quote
We believe in a Eurozone break-up scenario, current Fiat stockholders will end up owning shares in Ferrari and Chrysler.  Fiat owns 90% of Ferrari, and using the very recent Aston Martin sale valuation, such a stand-alone entity is worth €6.473 billion (Fiat’s 90% ownership is worth €4.79 per Fiat share).  Fiat’s 58.5% stake in Chrysler is currently worth €4.56-8.50 depending on which metric one uses (EBIT or EBITDA) and which entity one uses (Ford or GM).
http://www.gwinvestors.com/Main/Blog/Entries/2013/8/1_Exor_SpA_(EXO_IM)__The_Italians_Are_Coming.html

Quote
In our meeting with Marchionne last summer, he suggested in a nightmare European scenario, the highly profitable South American operations of Fiat could be sold to Chrysler and European operations simply shut-down to stop the bleeding.  A distribution of Ferrari stock, which alone is worth roughly the same price as Fiat’s stock today (using recent Aston Martin sale metrics), is not restricted by Fiat’s bond indentures, and has been discussed as likely after the merger between Chrysler and Fiat.  The Agnelli family has a recent track record of supporting value-creating corporate actions through the spin-off of Fiat and Fiat Industrial.  That split alone has helped Marchionne generate stock returns of 107% since arriving at the group in 2004, exactly twice the return that famed CEO Alan Mulally has managed at Ford under his own tenure.
http://www.gwinvestors.com/Main/Blog/Entries/2013/5/2_Fiat_SpA_(F_IM)__The_Bottom.html
Title: Re: FIATY - Fiat S.p.A.
Post by: worldaccordingtoGARP on December 20, 2013, 04:19:42 AM
There's another source of downside protection and that is in the form of Exor, the holding company of the Agnelli family. Exor is majorly owned by the Agnellis and is operated by the family. Exor is also the largest owner of Fiat equity and they are very well capitalized today. Their equity ownership and capitalization are a source of protection to Fiat, for they recognize the immense value in Fiat's equity. There is the implication that leverage is dangerous because of the increased risk of bankruptcy, though I would argue that even if something were to happen such that the leverage cuts Fiat the wrong way, Exor would be there for the company with capital in order to prevent a bankruptcy (I am thinking above and beyond the slice and dice the company could do given how each piece of debt is unsecured and limited to each relevant subcomponent of Fiat). It would be in their own best interest to do so, for it would protect their existing equity holdings and enable the company to realize the upside it intends to capture in the stock. This backing by Exor is also important in providing flexibility for the inevitable complete acquisition of Chrysler.
Title: Re: FIATY - Fiat S.p.A.
Post by: frommi on December 20, 2013, 05:29:35 AM
Ok, i think i slowly understand whats going on here.

According to the latest quarterly report FIAT ex Chrysler has 10.2 billion € net debt, that is mostly unsecured capital market debt which becomes due from 2014-2017.
Ferarri is worth between 3-6 billion €.
FIAT`s Chrysler package is worth between 6-8 billion €.

FIAT market cap is 6.65 billion €.

So i can think of some possible scenarios:

If shit hits the fan:

a) Ferrari & Chrylser are spin off, so the marketcap should reflect 9-14 billion €. The bondholders will get nothing. (Who is that?)
b) Ferrari & Chrylser are IPO`d or sold, the bondholders get everything, the stockholders get nothing. Perhaps unlikely, because the holding family is a stockholder. But can we ignore this scenario? (What if the bondholder is the government?)

The value of option a) diminishes over time, because the credit lines have to be payed back and i can`t really think that someone is so stupid and give FIAT a new unsecured line of credit.

If business is running normal:

FIAT standalone current value:

EV: 6.65 + 10.2 = 16.85
Ferrari: 3-6
Chrylser: 6-10

FIAT standalone: 0.85-7.85 billion €. So dependend on the valuations of Ferrari and Chrylser, FIAT standalone is currently valued between 0.85-7.85 billion €.  Thats sounds not overly undervalued. Is there something wrong with my numbers?





Title: Re: FIATY - Fiat S.p.A.
Post by: jay21 on December 20, 2013, 07:11:38 AM
Maserati is worth more than .85b so at least a portion of that range incorporates a negative value for Fiat. 
 
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on December 20, 2013, 07:16:18 AM
http://www.youtube.com/watch?v=Mtr9X8zslWA#t=438

for everybode who dont see the value of maserati  :)

Video was very nice, i can watch it all the time.

love the undervaluation!!!
Title: Re: FIATY - Fiat S.p.A.
Post by: nikhil25 on December 20, 2013, 10:45:23 AM
http://mobile.bloomberg.com/news/2013-12-20/fiat-said-to-restart-negotiations-to-buy-chrysler-stake.html?cmpid=yhoo
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on December 20, 2013, 11:02:10 AM
http://mobile.bloomberg.com/news/2013-12-20/fiat-said-to-restart-negotiations-to-buy-chrysler-stake.html?cmpid=yhoo


glad they are trying to work things out again and hopefully they can play nice.
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on December 20, 2013, 11:44:35 AM
http://mobile.bloomberg.com/news/2013-12-20/fiat-said-to-restart-negotiations-to-buy-chrysler-stake.html?cmpid=yhoo

hopefully the make now a deal. would be so nice to finally have the Merger and starting the new engine of the new Company.

i hope it so much that the make a deal in the next weeks  :)
Title: Re: FIATY - Fiat S.p.A.
Post by: LC on December 20, 2013, 01:10:32 PM
I've learned to not hold my breath. I think a deal will get done eventually. Marchionne said somewhere he doesn't plan on staying on with Fiat past 2015. I think a deal gets done before then and he puts the company on track to start running on all cylinders (I'm surprised it took this long for the car puns to emerge) by the time he steps down.

So maybe a deal gets done in 1H 2014 or maybe not, but I think Mr. Marchionne won't leave until a deal is done, but he won't rush a deal either.
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on December 20, 2013, 02:17:42 PM
Sergio said at the q3 cc that they will present a new 5 year plan in q1 2014, so i think they will achieve a deal in the next time. and it is my biggest hope.

Sergio is a wonderful leader, and he only steps down when the Merger is completed and the Transition is going on, full Speed with all the brands
Title: Re: FIATY - Fiat S.p.A.
Post by: merkhet on December 20, 2013, 03:50:50 PM
I've learned to not hold my breath. I think a deal will get done eventually. Marchionne said somewhere he doesn't plan on staying on with Fiat past 2015. I think a deal gets done before then and he puts the company on track to start running on all cylinders (I'm surprised it took this long for the car puns to emerge) by the time he steps down.

So maybe a deal gets done in 1H 2014 or maybe not, but I think Mr. Marchionne won't leave until a deal is done, but he won't rush a deal either.

I thought the Elkann said that Marchionne was staying on past 2015.
Title: Re: FIATY - Fiat S.p.A.
Post by: LC on December 20, 2013, 07:13:10 PM
Those were Elkann's most recent words, but I am not sold.

 Marchionne is 61 and by the time the Chrysler merger finally goes through will have gone through years of creating the 'new Fiat'. Negotiating with the union, dealing with all the Italian & European politics...I think there's a greater chance that, after a Chrysler deal is finalized, he will spend a modest amount of time setting everything up to move forward but then retire. This is just my personal conjecture but I'm not sure if he is the man to spearhead the new Fiat into the future, nor (given his tone on recent conf calls) does he want to be that man.
Title: Re: FIATY - Fiat S.p.A.
Post by: investor-man on December 22, 2013, 06:48:37 PM
Just trying to understand this.

Upsides

1. FIATY's EV/EBITDA multiple is much less than it's comps (pulled from Yahoo):

FIAT: EV/EBITDA = 2.56
GM: EV/EBITDA = 6.81
F: EV/EBITDA = 12.40
TM: EV/EBITDA = 8.57

2. It's a fairly good company. It's cars (Fiat and Chrysler) aren't quite as good as GM's but it should still trade at in roughly the same ball park.

3. Management is great. They are at about the tail end of a turn around and have refreshed many or most of the cars.

4. There is pent up demand in the US economy. The average age of a car in the US is 11 years, which is historically high, and the economy appears to be coming back, so one would think people will look to buy new cars.  This is good for the auto industry as a whole

Downsides

1. Possible dilution with purchase of larger share of Chrysler. This I don't quite understand. I'm pretty new to this, so I know I'm missing something here. It looks like they will get the shares they want for something like 4 to 4.5 billion. When I look on the balance sheet I see more than enough cash. Why can't they use that? I know I'm missing something if Chanos comments that it's a possible short because he thinks they'll issue more shares to purchase more of Chrysler. Anyone care to comment?

2. Alfa Romeo is launching in the US. It's a fairly unknown brand and will take a while to pick up steam.

3. Macro situation turns bad. Nuff said.

4. They seem to have quite a bit of debt. I need to look into this more. Anyone care to comment?
Title: Re: FIATY - Fiat S.p.A.
Post by: brker_guy on December 23, 2013, 02:23:24 PM
Very good series of stories from Bloomberg:

http://www.bloomberg.com/detroitrevival/
Title: Re: FIATY - Fiat S.p.A.
Post by: jay21 on December 27, 2013, 12:12:50 PM
2015 Alfa Romeo 4C, a lusty Italian: Motoramic Drives

"But the 4C is a tough thing with a clear purpose. Cash-bleeding Alfa Romeo cannot even dream of a global 3- or 5-Series BMW fighter that we all take seriously. So, what do they do? A really tight and well-arranged sports car sexy enough to turn heads, even in mother Italy. The 4C is dynamically just about 100 percent more interesting than the hot mess Alfa called the 8C Competizione. The engine here is in the right place – right behind the passenger cabin – and thus natural balance is in the 4C’s game. Weight distribution fore/aft is at 40/60 percent, so we’ve got a legit rear-drive funhouse on our hands."

"I wanted to snuff out some healthy skepticism, so I pushed the 4C extremely hard during my track time. The Alfa representative in the passenger seat during my hottest laps was visibly fretting, whining squeaks coming from his pursed lips, sweat building up on his forehead. When I set the 4C’s setup to Race mode for the final two hard laps, it was like breaking through a barrier at last. Everything on the 4C fell into step, and it was letting me dance through the tight test course. Even the Alfa guy found a sort of inner peace as he saw how well the car and its optional 18-inch Pirelli P Zero tires were doing in my rough Yankee hands.

In a full year of 4C production at the Maserati factory in Modena, Italy, the plan is to build 3,500 cars per year with 1,200 of those coming to the United States. Ours are heavier due to several added safety bits like additional airbags, not to mention our typical higher trim levels with more standard features.

Everyone wants to say the 4C competes with the Porsche Cayman, but it doesn’t. Then they all want to say, too, that it competes with the Lotus Elise S, which gets closer to the truth. In reality the 4C occupies its own place in the piazza —not as rough as the Lotus and not as refined and sophisticated as the Porsche, while being less expensive than either.

But, face it, this toy is mostly about sports car sex appeal. At that, it succeeds like only an Italian can."

http://autos.yahoo.com/blogs/motoramic/2015-alfa-romeo-4c-lusty-italian-motoramic-drives-215825876.html

If Alfa takes off...
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on December 27, 2013, 12:19:42 PM
i like the alfa romeo 4c really much. beatiful car. also a good Price. i hope they sell a lot of it
Title: Re: FIATY - Fiat S.p.A.
Post by: ZenaidaMacroura on January 01, 2014, 11:05:38 AM
http://www.twst.com/update/33502-fiat-spa-fiat-to-acquire-remaining-equity-interests-in-chrysler-group-llc-from-veba-trust

ferrari jeeps
Title: Re: FIATY - Fiat S.p.A.
Post by: jay21 on January 01, 2014, 11:13:48 AM
http://www.twst.com/update/33502-fiat-spa-fiat-to-acquire-remaining-equity-interests-in-chrysler-group-llc-from-veba-trust

ferrari jeeps

Awesome.  Pretty good way to structure it too.  No capital raise needed.
Title: Re: FIATY - Fiat S.p.A.
Post by: merkhet on January 01, 2014, 11:30:30 AM
I wonder if the self-funding will cause a ratings downgrade. Also, if my math is right, then Fiat is paying $6.4 billion? Interesting concession to VEBA to pay in $2.8 billion over four years.
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on January 01, 2014, 11:35:10 AM
Nice work guys, thanks to all!
Title: Re: FIATY - Fiat S.p.A.
Post by: Ian L on January 01, 2014, 11:41:10 AM
A happy 2014 indeed.
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on January 01, 2014, 11:42:41 AM
yesssssss, finally!!!!!!  :) :) :) :) :) :) 8) 8) 8) 8)
Title: Re: FIATY - Fiat S.p.A.
Post by: jay21 on January 01, 2014, 11:47:23 AM
I wonder if the self-funding will cause a ratings downgrade. Also, if my math is right, then Fiat is paying $6.4 billion? Interesting concession to VEBA to pay in $2.8 billion over four years.

It does seem a little complicated.  Here's the official press release: http://www.fiatspa.com/en-US/media_center/FiatDocuments/2014/Gennaio/Fiat_to_acquire_remaining_equity_interests_in_Chrysler_Group_LLC_from_VEBA_Trust.pdf

Part 1: Distribution from Chrysler of $1.9b
Part 2: Fiat pays $1.75b
Part 3: Concession to pay four annual payments totaling $700m with the first being on closing
Part 4:

"As part of the transactions, FNA and the VEBA Trust will agree to dismiss with prejudice the current
proceedings before the Delaware Court of Chancery with respect to the interpretation of the call
option agreement pursuant to which Fiat has, through FNA, exercised three tranches of a call option
to acquire membership interests in Chrysler Group held by the VEBA Trust. All of these membership
interests will be acquired by FNA in connection with the transactions described above."

Title: Re: FIATY - Fiat S.p.A.
Post by: leftcoast on January 01, 2014, 11:49:15 AM
I wonder if the self-funding will cause a ratings downgrade. Also, if my math is right, then Fiat is paying $6.4 billion? Interesting concession to VEBA to pay in $2.8 billion over four years.

It looks like $700M in aggregate over 4 years, not $700M each year. So I see a total purchase price of $1.75b + 1.9b + 700m = $4.35b.
Title: Re: FIATY - Fiat S.p.A.
Post by: LC on January 01, 2014, 11:52:06 AM
Earlier than I was anticipating...maybe Mr. Marchionne wanted to start out the new year on the right foot!

Deal seems pretty fair. I am happy they are paying under $5b. The extended payments of 700m also lightens the burden a bit as well...they can fund that from operations over the next few years.
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on January 01, 2014, 12:02:35 PM
4,35b$ is veryyy nice. and the best Thing is the only have to pay 3,6b$ now.

as i mentioned in an earlier post, Sergio said in the last conference call from q3 that fiat will give out a new 5year plan in q1 2014. so iam very excited. finally they are one company
Title: Re: FIATY - Fiat S.p.A.
Post by: ZenaidaMacroura on January 01, 2014, 12:03:26 PM
I wonder if the self-funding will cause a ratings downgrade. Also, if my math is right, then Fiat is paying $6.4 billion? Interesting concession to VEBA to pay in $2.8 billion over four years.

It looks like $700M in aggregate over 4 years, not $700M each year. So I see a total purchase price of $1.75b + 1.9b + 700m = $4.35b.
That was my interpretation too:

Fiat said it had also agreed on additional contributions by Chrysler to VEBA of $700m in four equal annual installments in return for a series of union commitments to support the Fiat-Chrysler alliance


If it had said 4 installments of $700M, it would have meant 2.8B - by my interpretation.   The language would have forgone the "equal" redundancy...
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on January 01, 2014, 12:03:53 PM
I didn;t think they would be negotiating during the holidays.
I  didn't have a chance to load up even more....
Title: Re: FIATY - Fiat S.p.A.
Post by: bmichaud on January 01, 2014, 12:13:17 PM
Complicated deal, but now that it's in place buy the dips!!!
Title: Re: FIATY - Fiat S.p.A.
Post by: plato1976 on January 01, 2014, 12:53:54 PM
any dip ahead ? I somehow doubt
I feel we will gap up tomorrow


Complicated deal, but now that it's in place buy the dips!!!
Title: Re: FIATY - Fiat S.p.A.
Post by: bmichaud on January 01, 2014, 01:08:25 PM
I'd love a straight shot to $15, but I imagine after a gap up there will be some dips available to buy more. Not as absolutely cheap after a gap up, but now that uncertainty is lifted, the probability of a $15 or $20 stock price is much higher. Had Chrysler IPOed and then fiat buy it out, IMO it would have taken longer to get to $15 or $20, if ever.

Much like BACs initial move from $5 to $9 - it eventually consolidated back down to $7 :)
Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on January 01, 2014, 03:59:14 PM
The way Marchionne has played this poker game is simply amazing.
Title: Re: FIATY - Fiat S.p.A.
Post by: SwedishValue on January 01, 2014, 04:10:54 PM
Will be interesting to see what happens tomorrow in the markets. Does anyone here have an opinion of the value created by the deal? Have not been looking into FIAT yet but it is very high on my to do list.
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on January 01, 2014, 04:33:02 PM
The way Marchionne has played this poker game is simply amazing.

General Motors stake in Fiat, Fiat entry in Chrysler, closing of plants in Italy, Veba sale. The story always ends the same: Sergio wins.
Title: Re: FIATY - Fiat S.p.A.
Post by: LC on January 01, 2014, 04:45:43 PM
Will be interesting to see what happens tomorrow in the markets. Does anyone here have an opinion of the value created by the deal? Have not been looking into FIAT yet but it is very high on my to do list.
Marchionne can play a truly global game now. He can move capacity around the world, opportunistically. It gives him a stronger hand within Europe. He is already consolidating the manufacturing base on which Chrysler and Fiat produce. It will give him full access to Chrysler's balance sheet/cash flow. He can build out from Brazil with more resources at his fingertips. And he got the deal done for a relatively good price. Really good business decisions on his part...Fiat is lucky to have him!

I would suggest listening to his conference call from about a month ago to get a glimpse into his character and intelligence, when you go about evaluating him as a CEO.
Title: Re: FIATY - Fiat S.p.A.
Post by: plato1976 on January 01, 2014, 04:53:58 PM
Did anyone calculate that after this deal and the transfer of the health care liability , what's the leverage level of the new Fiat ? Really the only concern left compared with other large producers like GM. But the leverage is also the source of the extra return potential


Will be interesting to see what happens tomorrow in the markets. Does anyone here have an opinion of the value created by the deal? Have not been looking into FIAT yet but it is very high on my to do list.
Marchionne can play a truly global game now. He can move capacity around the world, opportunistically. It gives him a stronger hand within Europe. He is already consolidating the manufacturing base on which Chrysler and Fiat produce. It will give him full access to Chrysler's balance sheet/cash flow. He can build out from Brazil with more resources at his fingertips. And he got the deal done for a relatively good price. Really good business decisions on his part...Fiat is lucky to have him!

I would suggest listening to his conference call from about a month ago to get a glimpse into his character and intelligence, when you go about evaluating him as a CEO.
Title: Re: FIATY - Fiat S.p.A.
Post by: krazeenyc on January 01, 2014, 04:59:59 PM
Great deal.

I'm excited :D. I'm curious to see the magnitude of the market's reaction both tomorrow and over the coming weeks/months. GL.
Title: Re: FIATY - Fiat S.p.A.
Post by: hyten1 on January 01, 2014, 06:28:37 PM
man, i was looking at fiaty the past few days (have been slow due to the holidays), planning on initiate a decent position this coming week :(

hy
Title: Re: FIATY - Fiat S.p.A.
Post by: plato1976 on January 01, 2014, 08:29:29 PM
Not sure if you guys noticed this from wsj:

"
Even with the deal, Fiat still won't have free access to Chrysler's cash because of restrictions on the U.S. auto maker's debt agreements.

At the end of the third quarter, Chrysler had $11.5 billion in cash.
"


man, i was looking at fiaty the past few days (have been slow due to the holidays), planning on initiate a decent position this coming week :(

hy
Title: Re: FIATY - Fiat S.p.A.
Post by: Packer16 on January 01, 2014, 08:51:22 PM
But they did have access to enough cash to pay for the deal and not have to issue equity (which I think was the primary near-term need for cash).

Packer
Title: Re: FIATY - Fiat S.p.A.
Post by: merkhet on January 01, 2014, 08:59:07 PM
I wonder if the self-funding will cause a ratings downgrade. Also, if my math is right, then Fiat is paying $6.4 billion? Interesting concession to VEBA to pay in $2.8 billion over four years.

It looks like $700M in aggregate over 4 years, not $700M each year. So I see a total purchase price of $1.75b + 1.9b + 700m = $4.35b.
That was my interpretation too:

Fiat said it had also agreed on additional contributions by Chrysler to VEBA of $700m in four equal annual installments in return for a series of union commitments to support the Fiat-Chrysler alliance


If it had said 4 installments of $700M, it would have meant 2.8B - by my interpretation.   The language would have forgone the "equal" redundancy...

Yup. I misread.
Title: Re: FIATY - Fiat S.p.A.
Post by: LC on January 01, 2014, 10:18:59 PM
Good find, plato. I wonder if anything can be done now to access that cash...
Title: Re: FIATY - Fiat S.p.A.
Post by: indirect on January 02, 2014, 12:09:51 AM
Fiat at 6.68 currently at Milan up 12%
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on January 02, 2014, 01:16:27 AM
Quote
In our Industrials Observer report published December 16, we said that Fiat would pay EUR 3.2 billion for the rest of Chrysler. At the current exchange rate of USD 1.3738 to EUR 1, USD 4.35 billion is EUR 3.166 billion. The final consideration is not what the union said it expected to get from an IPO--more than USD 5.0 billion.

We do not anticipate any change to our EUR 14 fair value estimate for Fiat shares since we hit the valuation nail squarely on the head. However, there could be a slight upward bias because we included the assumption the deal would be closed by the end of the second quarter. With the deal closing possibly on Jan. 20, nearly two quarters of Chrysler earnings at 100% of ownership are not accounted for in our fair value estimate. But since the incremental earnings are in the first part of our five-year DCF, we expect the upward bias on our EUR 14 fair value estimate to be minimal. Still, the 5-star rated shares represent exceptional value for those investors who are willing to accept the risk of a highly-levered turnaround situation in a cyclical, capital intensive, globally competitive industry.

The deal is funded by Chrysler paying a USD 1.9 billion dividend to its equity holders--the VEBA and Fiat. Fiat takes its share of the dividend and uses it in the transaction. Fiat also takes $1.75 billion from its coffers to pay for the deal. That brings the total up to $3.65 billion for the Chrysler shares held by the VEBA. However, Fiat also committed to USD 700 million in additional VEBA funding (which brings the total to USD 4.35 billion). The USD 700 million gets paid in four annual installments. The first installment is paid at the close of the transaction to buy the Chrysler shares from the VEBA. As a result, Fiat takes a total USD 1.925 billion out of its cash account at closing. There will be three more installments of USD 175 million each of the next three years on the anniversary of the closing date.

Overall, this looks like a fair deal for the union and a reasonable valuation on Chrysler. We applaud Fiat management for remaining constant in the face of union pressure for a higher price. Some will say that Fiat got a really great deal because it values the shares at USD 3.65 billion and it values Chrysler at a total enterprise value of USD 21.6 billion, for a 3.8x estimated EBITDA multiple. In our opinion, the deal values the shares at USD 4.35 billion because the UAW wouldn’t have agreed to a transaction without the additional USD 700 million funding for the VEBA. In our view, Fiat pays USD 3.825 at closing (including the first $175 million installment) and gives the VEBA a 0% note for USD 525 million payable in three equal annual installments of USD 175 million. That makes Chrysler’s total enterprise value USD 23.3 billion at an EV/EBITDA multiple of 4.1x (not including a three-year present value calculation).

Title: Re: FIATY - Fiat S.p.A.
Post by: skanjete on January 02, 2014, 01:55:57 AM
Brilliant deal for Fiat and Marchionne.
Now we can wait until the Chrysler stake is being valued correctly by the market.
Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on January 02, 2014, 02:19:19 AM
Brilliant deal for Fiat and Marchionne.
Now we can wait until the Chrysler stake is being valued correctly by the market.

It won´t happen overnight and there will likely be opportunities along the way.

Judging by the CNHI experience, they might incorporate FIAT in the Netherlands, move the listing to NYSE and then refi some of the debt.
Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on January 02, 2014, 03:50:22 AM
Quote
The agreement to pay $1.75 billion to the U.A.W. means that Fiat will have paid a total $3.7 billion to acquire Chrysler, much less than the $36 billion Daimler-Chrysler paid for the company in 1998 or the $7.4 billion Cerberus Capital Management paid to acquire an 80 percent stake in 2007.

http://www.nytimes.com/2014/01/02/business/fiat-in-deal-with-union-will-buy-rest-of-chrysler.html?ref=business
Title: Re: FIATY - Fiat S.p.A.
Post by: bmichaud on January 02, 2014, 03:57:50 AM
Case in point why it's still a table pounding buy...up only 14 to 16% in Europe today!!
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on January 02, 2014, 06:42:12 AM
what a nice Price Action today. love it  8)
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on January 02, 2014, 07:39:08 AM
Chrysler Brings Extra Debt Dowry to Fiat


http://blogs.wsj.com/moneybeat/2014/01/02/fiat-wins-equity-bet-with-chrysler-deal-but-debt-issues-dont-disappear/ (http://blogs.wsj.com/moneybeat/2014/01/02/fiat-wins-equity-bet-with-chrysler-deal-but-debt-issues-dont-disappear/)
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on January 02, 2014, 07:42:47 AM
Fiat's Chrysler Trick Is No Panacea

Acquisition Won't Solve All Fiat's Problems

Quote
If you're going to buy a company, it helps to get the acquisition target to pay most of the cost.

That is the trick Fiat F.MI +14.38%  has pulled off in a deal to buy the 41.5% of Chrysler it didn't already own for a total of $4.35 billion from the VEBA Trust, a health-care fund affiliated to the United Auto Workers union. Chrysler will contribute $1.9 billion of the asking price immediately via a dividend paid to Fiat and VEBA; it will pay the trust a further $700 million over the next four years. The Italian company itself is on the hook for just $1.75 billion.

Shifting the funding burden to Chrysler means Fiat should avoid the need for a rights issue. It also means an end to its long-running dispute with VEBA over how to value the trust's stake in Chrysler that had latterly reached the courts. The prospect of a Chrysler flotation, previously seen as one way of ending that disagreement, has now hit the buffers too.

That has all given Fiat investors reason to cheer: Its shares jumped 13% on Thursday. Consolidating Chrysler fully brings Fiat Chief Executive Sergio Marchionne's dream of building a global auto-making powerhouse closer. Certainly Chrysler has been vital to Fiat recently, as the Italian company suffered in its downbeat core European markets. The Fiat Group made a €655 million ($900.3 million) net profit in the first three months of 2013; without Chrysler, that would have been a €729 million loss.

Still, however cleverly Fiat splits the cost of buying out VEBA, the money is still coming from the group as a whole—leaving it as Europe's most indebted auto maker bar Peugeot, according to Citi. Including Chrysler's €8.7 billion pension deficit means the Fiat group has an enterprise value of over €28 billion, just over four times its expected earnings before interest, tax, depreciation and amortization—not especially cheap relative to the rest of the auto sector, according to Sanford C. Bernstein.

Fiat still faces chronic overcapacity in Europe; it is subscale in Asia while its earnings in South America are on the slide. Bringing Chrysler fully into the fold won't solve all of Fiat's problems.



http://online.wsj.com/news/articles/SB10001424052702303640604579296192064586278 (http://online.wsj.com/news/articles/SB10001424052702303640604579296192064586278)
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on January 02, 2014, 08:45:45 AM
what a nice Price Action today. love it  8)

Yeah! I am very excited that I increased the position from 12% to 33% in December. This is my first big bet since I started learning investing. :D
Title: Re: FIATY - Fiat S.p.A.
Post by: Grenville on January 02, 2014, 09:13:39 AM
I'm a little late on this idea. Just starting the diligence. Had a question for board members.

What is the equivalent to the 10K when researching FIATY?

The reason I ask is that in the US, the 10K and annual report are different. One can be a marketing document without all the relevant details. I found the annual report on Fiaty's website. I just want to make sure there isn't another place I should look.
Title: Re: FIATY - Fiat S.p.A.
Post by: plato1976 on January 02, 2014, 09:26:51 AM

I think even from the ev/ebitda perspective fiat is a cheap one
Cheaper than ford
Similar to GM which by itself is undervalued
Certainly cheaper than most other producers

Fiat's Chrysler Trick Is No Panacea

Acquisition Won't Solve All Fiat's Problems

Quote
If you're going to buy a company, it helps to get the acquisition target to pay most of the cost.

That is the trick Fiat F.MI +14.38%  has pulled off in a deal to buy the 41.5% of Chrysler it didn't already own for a total of $4.35 billion from the VEBA Trust, a health-care fund affiliated to the United Auto Workers union. Chrysler will contribute $1.9 billion of the asking price immediately via a dividend paid to Fiat and VEBA; it will pay the trust a further $700 million over the next four years. The Italian company itself is on the hook for just $1.75 billion.

Shifting the funding burden to Chrysler means Fiat should avoid the need for a rights issue. It also means an end to its long-running dispute with VEBA over how to value the trust's stake in Chrysler that had latterly reached the courts. The prospect of a Chrysler flotation, previously seen as one way of ending that disagreement, has now hit the buffers too.

That has all given Fiat investors reason to cheer: Its shares jumped 13% on Thursday. Consolidating Chrysler fully brings Fiat Chief Executive Sergio Marchionne's dream of building a global auto-making powerhouse closer. Certainly Chrysler has been vital to Fiat recently, as the Italian company suffered in its downbeat core European markets. The Fiat Group made a €655 million ($900.3 million) net profit in the first three months of 2013; without Chrysler, that would have been a €729 million loss.

Still, however cleverly Fiat splits the cost of buying out VEBA, the money is still coming from the group as a whole—leaving it as Europe's most indebted auto maker bar Peugeot, according to Citi. Including Chrysler's €8.7 billion pension deficit means the Fiat group has an enterprise value of over €28 billion, just over four times its expected earnings before interest, tax, depreciation and amortization—not especially cheap relative to the rest of the auto sector, according to Sanford C. Bernstein.

Fiat still faces chronic overcapacity in Europe; it is subscale in Asia while its earnings in South America are on the slide. Bringing Chrysler fully into the fold won't solve all of Fiat's problems.



http://online.wsj.com/news/articles/SB10001424052702303640604579296192064586278 (http://online.wsj.com/news/articles/SB10001424052702303640604579296192064586278)
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on January 02, 2014, 10:31:53 AM
Fiat-Chrysler to seek NYSE listing this year
 



Quote
Carmaker Fiat-Chrysler is aiming to list in New York within the year, underling the group’s emergence as a US-centric organisation following chief executive Sergio Marchionne’s successful broker of a full merger of the US group with its Italian partner.
 
In a long-awaited deal, Fiat announced on New Year’s day it will buy the 41.5 per cent of Chrysler that it does not already own from the Veba union healthcare trust for a total of $4.35bn.


 
The completion of the deal by January 20 will be followed by a shake up of the merged group’s corporate structure in line with its global footprint, banking sources said. Half of Fiat-Chrysler’s combined volumes come from North America.
 
Banking sources said CNH Industrial, a sister company to Fiat-Chrysler, is a template for the governance and corporate structure of a fully integrated Fiat-Chrysler. Born out of Fiat, the industrial goods group is a Netherlands-registered company, listed in New York, with a secondary listing in Milan and tax domicile in the UK.

Fiat shares rose 16 per cent on news of the deal to €6.92, the biggest intraday gain since 2009. The stock had risen 57 per cent in 2013.
 
Max Warburton, an analyst at Bernstein Research, said the costs and financing of the deal were more favourable to Fiat than the market expected. “The deal successfully secures Fiat’s operational and financial future,” he added.
 
Fiat, which already owns 58.5 per cent of Chrysler, will pay the trust $1.75bn in cash when the deal closes. Chrysler will contribute $1.9bn through a special dividend to complete the transaction for the 41.5 per cent stake.

Chrysler will also pay the trust $700m in four annual instalments, with the first to be made when the deal closes. Fiat said it would not need to raise cash to complete the deal. Fiat-Chrysler’s net debt will rise to about €10bn excluding pension contributions, said Philip Watkins, car analyst at Citigroup.
 
People familiar with Mr Marchionne’s thinking say a fully merged Fiat-Chrysler could issue a convertible bond in the region of €1bn to €1.5bn in tandem with its launch on the New York Stock Exchange to help ease that debt load.
 
The full merger of Fiat and Chrysler crowns Mr Marchionne’s decade-long turnround of the Italian and US carmakers and underlines his reputation as a consummate dealmaker. It also shifts focus sharply on to succession planning at the group.
 
People close to Mr Marchionne, one of the longest running car industry chief executives, expect the three-year business plan due to be presented in the spring to be his last triennial plan for the group.



http://www.ft.com/intl/cms/s/0/ce546f0c-73c7-11e3-a0c0-00144feabdc0.html?siteedition=intl#axzz2pGdN3tye (http://www.ft.com/intl/cms/s/0/ce546f0c-73c7-11e3-a0c0-00144feabdc0.html?siteedition=intl#axzz2pGdN3tye)
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on January 02, 2014, 10:53:00 AM
Marchionne Completes Fiat-Chrysler Mission on a Florida Beach

http://www.businessweek.com/news/2014-01-02/marchionne-completes-fiat-chrysler-mission-on-a-florida-beach#p1 (http://www.businessweek.com/news/2014-01-02/marchionne-completes-fiat-chrysler-mission-on-a-florida-beach#p1)
Title: Re: FIATY - Fiat S.p.A.
Post by: LC on January 02, 2014, 11:43:22 AM
I'm a little late on this idea. Just starting the diligence. Had a question for board members.

What is the equivalent to the 10K when researching FIATY?

The reason I ask is that in the US, the 10K and annual report are different. One can be a marketing document without all the relevant details. I found the annual report on Fiaty's website. I just want to make sure there isn't another place I should look.

20F I believe.
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on January 02, 2014, 12:13:34 PM
http://online.wsj.com/news/articles/SB10001424052702303870704579296312287689146 (http://online.wsj.com/news/articles/SB10001424052702303870704579296312287689146)

The Fiat-Chrysler Combination Still Faces Hurdles

Merged Company Must Address a Dearth of Recent Research and Development Spending
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on January 02, 2014, 12:17:08 PM
wsj.com with a lot of negative article´s today about fiat
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on January 02, 2014, 12:17:31 PM
http://dealbook.nytimes.com/2014/01/02/chrysler-deal-puts-fiat-chief-in-the-fast-lane/?_r=0 (http://dealbook.nytimes.com/2014/01/02/chrysler-deal-puts-fiat-chief-in-the-fast-lane/?_r=0)

Chrysler Deal Puts Fiat Chief in the Fast Lane
Title: Re: FIATY - Fiat S.p.A.
Post by: Grenville on January 02, 2014, 12:39:41 PM
I'm a little late on this idea. Just starting the diligence. Had a question for board members.

What is the equivalent to the 10K when researching FIATY?

The reason I ask is that in the US, the 10K and annual report are different. One can be a marketing document without all the relevant details. I found the annual report on Fiaty's website. I just want to make sure there isn't another place I should look.

20F I believe.

LC,

Thanks. I couldn't find the 20F for 2012 on the Fiat website. All I find is the annual report.
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on January 02, 2014, 01:38:49 PM
We retain our Reduce rating, TP raised from EUR4.4 to EUR5
Fiat shares trade at 29% EV/Sales and 3x EV/EBITDA on our updated
2014 estimates, at a significant premium to European peers (19% and
2.1x) and close to US OEM multiples (32% and 3.8x) despite Chrysler
being a much less profitable and cash-generative business than Ford or
GM historically. The depressed earnings multiple (5.4x 2014E) has to be
put into perspective with a balance sheet structure that remains
inadequate and will still require asset disposals and/or capital measures at
one point, in our view. Our SOP implies a fair value close to EUR5, our new
target price (up from EUR4.4).
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on January 02, 2014, 01:52:27 PM
Is Jim Chanos still short Fiat? That would be a bad day for him :)
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on January 02, 2014, 01:54:36 PM
We retain our Reduce rating, TP raised from EUR4.4 to EUR5
Fiat shares trade at 29% EV/Sales and 3x EV/EBITDA on our updated
2014 estimates, at a significant premium to European peers (19% and
2.1x) and close to US OEM multiples (32% and 3.8x) despite Chrysler
being a much less profitable and cash-generative business than Ford or
GM historically. The depressed earnings multiple (5.4x 2014E) has to be
put into perspective with a balance sheet structure that remains
inadequate and will still require asset disposals and/or capital measures at
one point, in our view. Our SOP implies a fair value close to EUR5, our new
target price (up from EUR4.4).

Thanks, to be honest, I don't really like Kepler's research...

The sellside is so negative on Fiat, unbelievable.
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on January 02, 2014, 02:11:11 PM
We retain our Reduce rating, TP raised from EUR4.4 to EUR5
Fiat shares trade at 29% EV/Sales and 3x EV/EBITDA on our updated
2014 estimates, at a significant premium to European peers (19% and
2.1x) and close to US OEM multiples (32% and 3.8x) despite Chrysler
being a much less profitable and cash-generative business than Ford or
GM historically. The depressed earnings multiple (5.4x 2014E) has to be
put into perspective with a balance sheet structure that remains
inadequate and will still require asset disposals and/or capital measures at
one point, in our view. Our SOP implies a fair value close to EUR5, our new
target price (up from EUR4.4).

Thanks, to be honest, I don't really like Kepler's research...

The sellside is so negative on Fiat, unbelievable.

i stop Long time ago to read bullshit. kepler and all of the other brilliant and hyper intellegient Analysts are in the bullshit area ;D ;D ;D
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on January 03, 2014, 02:27:52 AM
Is Jim Chanos still short Fiat? That would be a bad day for him :)

http://www.valuewalk.com/2014/01/fiat-chrysler-catches-shortsellers-guard/

chanos sold his short fiat at a loss in october
Title: Re: FIATY - Fiat S.p.A.
Post by: bmichaud on January 03, 2014, 05:25:41 AM
And....fiat is down 4% today. Buy the dips :)
Title: Re: FIATY - Fiat S.p.A.
Post by: merkhet on January 03, 2014, 07:16:09 AM
Is Jim Chanos still short Fiat? That would be a bad day for him :)

http://www.valuewalk.com/2014/01/fiat-chrysler-catches-shortsellers-guard/

chanos sold his short fiat at a loss in october

That's interesting. I had lunch with Professor Chanos early in October and tried to ask him about his Fiat thesis. He was fairly mum on the subject.
Title: Re: FIATY - Fiat S.p.A.
Post by: intensityjp on January 03, 2014, 11:28:05 AM
Hey guys great thread thanks for all the work.  I had a question regarding the EV and specifically the Net Debt & Pension calculation.  Referring to this writeup:

http://www.gwinvestors.com/Main/Blog/Entries/2013/5/2_Fiat_SpA_(F_IM)__The_Bottom.html

This article really helped me understand the upside for this situation, however in table 3 the author lists Net Debt & Pension at 16.3B euro.  It was written in May of 2013 at which time the Q1 consolidated statement read 29B debt, 11.7 in Employee Benefits minus 18.8B Cash and Current Investments which nets to 21.9B. This is obviously materially off from 16.3.

In the latest filings, the numbers are 29B debt, 10.4B employee benefits minus 16.8B Cash which nets 22.6.

What am I missing from my calculation? Thanks!
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on January 03, 2014, 11:42:25 AM
to all other Longs in Fiat. what do you are thinking about the possibilty for a ferrari spinoff after the probably fiat listing in new York this year?

Title: Re: FIATY - Fiat S.p.A.
Post by: Ian L on January 03, 2014, 01:05:27 PM
to all other Longs in Fiat. what do you are thinking about the possibilty for a ferrari spinoff after the probably fiat listing in new York this year?

I would doubt it. Ferrari helps out with Maserati and Alfa Romeo. It is such a valuable brand to have, I doubt they would separate it out.
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on January 03, 2014, 01:08:58 PM
to all other Longs in Fiat. what do you are thinking about the possibilty for a ferrari spinoff after the probably fiat listing in new York this year?

Segio said he would spin off Ferrari in a nightmare scenario. So clearly no need to do so now.
Title: Re: FIATY - Fiat S.p.A.
Post by: racemize on January 03, 2014, 02:31:57 PM
Hey guys great thread thanks for all the work.  I had a question regarding the EV and specifically the Net Debt & Pension calculation.  Referring to this writeup:

http://www.gwinvestors.com/Main/Blog/Entries/2013/5/2_Fiat_SpA_(F_IM)__The_Bottom.html

This article really helped me understand the upside for this situation, however in table 3 the author lists Net Debt & Pension at 16.3B euro.  It was written in May of 2013 at which time the Q1 consolidated statement read 29B debt, 11.7 in Employee Benefits minus 18.8B Cash and Current Investments which nets to 21.9B. This is obviously materially off from 16.3.

In the latest filings, the numbers are 29B debt, 10.4B employee benefits minus 16.8B Cash which nets 22.6.

What am I missing from my calculation? Thanks!

Q1 report has net debt as: 9 billion (page 50)
Then employee benefits provision is 6.8 billion (page 18)

Totals to: 15.8 billion.

Q3 report has net debt as: 11.4 billion (page 22)
Then employee benefits provision is: 10.4 billion (page 26)

Totals to: 21.8 billion

There were comments that the Q3 numbers were seasonal in the call.  Net debt will be affected by the cash payments too.
Title: Re: FIATY - Fiat S.p.A.
Post by: argonaut on January 04, 2014, 12:33:48 PM
Barron's article today:
Chrysler in Tow, Fiat Can Now Burn Rubber

http://on.barrons.com/1bFt1Dy

You may need a subscription to read it.
Title: Re: FIATY - Fiat S.p.A.
Post by: hellsten on January 04, 2014, 04:46:34 PM
Barron's article today:
Chrysler in Tow, Fiat Can Now Burn Rubber

http://on.barrons.com/1bFt1Dy

You may need a subscription to read it.


Quote
Fiat shares (ticker: F.Italy) could double in value in a couple of years. The stock defied most analysts' expectations in 2013, and could do so again in 2014.

Fiat looks pricey based on conventional metrics, but they are misleading. Morningstar analysts David Whiston and Richard Hilgert argue that applying a multiple of enterprise value to the coming year's estimated earnings before interest, taxes, depreciation, and amortization—the preferred valuation method for auto companies—irrationally discounts the value of Fiat's assets.

Instead they rely on a depreciated cash-flow model that takes into account increased risks for investors, such as the higher cost of equity and debt. They seem to be onto something. In 2013, when most analysts were bearish on the stock, they were bullish. Fiat's Milan-listed shares gained 57% last year.

Whiston and Hilgert estimate Fiat's fair value at 14 euros ($19.04) per share, more than double Friday's closing price of €6.76. A consensus of analysts' estimates yields a price target of €5.42, about 20% below the latest price. "The market just doesn't get it," says Hilgert. "Fiat stock currently trades at a very compelling valuation."

Fiat burned rubber last week, racing ahead 16% after the Turin-based company announced it had agreed to buy, for $4.35 billion, the 41.5% stake in Chrysler it didn't already own. Following the run-up in price, the stock trades for 15.6 times estimated 2014 earnings of 44 European cents per share. The auto maker is thought to have earned €0.18 in 2013 on projected revenue of €87 billion.

The Chrysler deal was expected, but the timing and favorable terms were a pleasant surprise, and enhanced the reputation of Fiat Chief Executive Sergio Marchionne for savvy dealmaking. Half the initial outlay of $3.65 billion comes from Chrysler's own coffers, so the increased debt associated with the deal—initially, $1.9 billion—isn't as burdensome as feared. Fiat's debt is expected to peak at about €22 billion next year. Due to a projected increase in cash flow, the ratio of adjusted net debt to earnings before interest, tax, depreciation, amortization, and restructuring costs could drop to 3.6 in 2015 from 3.8 in 2012.
Title: Re: FIATY - Fiat S.p.A.
Post by: leftcoast on January 04, 2014, 04:56:42 PM
New video blog entry from Greenwood Investors, with updated thesis following Chrysler deal.

Fiat SpA (F IM): The Two Year Honeymoon (http://www.gwinvestors.com/Main/Blog/Entries/2014/1/4_F_IM_.html)
http://www.gwinvestors.com/Main/Blog/Entries/2014/1/4_F_IM_.html
We are pleased to present out basic thesis on Fiat in this 15 minute youtube video.
Title: Re: FIATY - Fiat S.p.A.
Post by: LC on January 04, 2014, 09:06:27 PM
I'm a little late on this idea. Just starting the diligence. Had a question for board members.

What is the equivalent to the 10K when researching FIATY?

The reason I ask is that in the US, the 10K and annual report are different. One can be a marketing document without all the relevant details. I found the annual report on Fiaty's website. I just want to make sure there isn't another place I should look.

20F I believe.

LC,

Thanks. I couldn't find the 20F for 2012 on the Fiat website. All I find is the annual report.

Ah sorry...I don't think they are required to file a 20F anymore as they are not listed on the NYSE. Only the ADR is. So I believe it is just the annual report and the mid-year (transitional?) report. But their I/R page has regular information releases that are more current as well.
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on January 05, 2014, 04:07:41 AM
New video blog entry from Greenwood Investors, with updated thesis following Chrysler deal.

Fiat SpA (F IM): The Two Year Honeymoon (http://www.gwinvestors.com/Main/Blog/Entries/2014/1/4_F_IM_.html)
http://www.gwinvestors.com/Main/Blog/Entries/2014/1/4_F_IM_.html
We are pleased to present out basic thesis on Fiat in this 15 minute youtube video.

what a nice Video!!!! very nice  :) :) :) :)
Title: Re: FIATY - Fiat S.p.A.
Post by: frommi on January 05, 2014, 04:21:56 AM
At first congratulation for everybody involved in FIAT. That was really a great deal and faster than expected.
It was on my too-hard pile and stays there, but i want to learn more. Since this is a cyclical business, how do you know when the cycle starts/ends? Given what i read before its common that cyclical stocks look cheap at the top and expensive at the bottom, is it something else with FIAT or am i wrong that this is a cyclical business or what am i missing here?
Whats the exit plan for your investment in FIAT, or is there none? (Hold forever?)
Title: Re: FIATY - Fiat S.p.A.
Post by: Packer16 on January 05, 2014, 04:36:02 AM
The way I look at Fiat and GM is via the car purchasing cycle and pent-up demand.  Peter Lynch has a great description of this in his "Beating the Street" book in Chapter 15.  Car demand has essentially grown slowly over time but is cyclical over time.  Before 2008, there was an oversupply but since then there has been 2008/2009 which reduced demand temporarily and physically destroyed inventory (cash for clunkers).  By my calcs, we still have some pent-up demand to supply.  This may flip in the next few years.  In this case the most levered play would go up the most but you also need excellent management which you have.  If Fiat jumped to the high teens to low 20s, I would seriously consider selling.  Other data points are Morningstar's analysis and Greenwood's case.

Packer
Title: Re: FIATY - Fiat S.p.A.
Post by: frommi on January 05, 2014, 05:08:28 AM
Ist it possible to predict economic cycles by inventory numbers? Doesn`t this mean we have an independend stock market indicator, because car sales drops are often aligned with recessions?

Quote
Out of the latest news: GM and Ford sales disappoint in December

Isn`t this a first warning sign?
Title: Re: FIATY - Fiat S.p.A.
Post by: steph on January 05, 2014, 05:15:43 AM
Nice video from Greenwood, but I went to their website and was not really impressed by their track record. So I am not so sure if their analysis is of great value.
Title: Re: FIATY - Fiat S.p.A.
Post by: Packer16 on January 05, 2014, 05:24:39 AM
Pent-up demand is the key variable.  LT demand changes slowly over time.  Folks have to buy cars to move around and eventually they wear out.  The pent-up demand concept captures the LT underlying fundamentals while inventory reflects the shorter picture.  The headlines you show are a short term correction in a longer term demand recovery.  If the same headline occurs 3 years from now and production has been above LT trend for 3 years then there is a concern.  Right now we are right at LT trend production with a number of year of below LT trend production.

Packer
Title: Re: FIATY - Fiat S.p.A.
Post by: jay21 on January 05, 2014, 06:27:03 AM
There are a few different reasons why I think revenue and earnings will continue to increase (i.e. this is not a bottom):

- pent up demand and high average age of autos
- low housing starts, more starts means more pickups
- Recession in Europe, but who knows when this will turn
- Expanding middle classes worldwide.  There will be a lot more autos in the world in the next few decades
Title: Re: FIATY - Fiat S.p.A.
Post by: merkhet on January 05, 2014, 08:24:57 AM
Nice video from Greenwood, but I went to their website and was not really impressed by their track record. So I am not so sure if their analysis is of great value.

I'm not sure anyone should rely on track records to influence perceptions of analysis.  The analysis should probably rest on its own -- FWIW, I think their analysis is pretty good.
Title: Re: FIATY - Fiat S.p.A.
Post by: plato1976 on January 05, 2014, 08:51:52 AM
btw:  their hedge didn't perform well

Nice video from Greenwood, but I went to their website and was not really impressed by their track record. So I am not so sure if their analysis is of great value.

I'm not sure anyone should rely on track records to influence perceptions of analysis.  The analysis should probably rest on its own -- FWIW, I think their analysis is pretty good.
Title: Re: FIATY - Fiat S.p.A.
Post by: bmichaud on January 05, 2014, 08:52:12 AM
Haven't looked at their track record, but if their fiat analysis is anything like their 2008 Ford thesis, then it's pretty solid.
Title: Re: FIATY - Fiat S.p.A.
Post by: steph on January 05, 2014, 09:02:48 AM
Nice video from Greenwood, but I went to their website and was not really impressed by their track record. So I am not so sure if their analysis is of great value.

I'm not sure anyone should rely on track records to influence perceptions of analysis.  The analysis should probably rest on its own -- FWIW, I think their analysis is pretty good.

Investing is more art than science. The track record of a person is therefore essential. I have seen too many brilliantly written and documented reports which turned out to be lousy investment ideas. My personal knowledge about the car industry is limited so I cannot judge if this analysis (which seems very good) is complete or if some important facts are omitted. I therefore have to rely on past performance of the author.   
Title: Re: FIATY - Fiat S.p.A.
Post by: merkhet on January 05, 2014, 09:09:50 AM
btw:  their hedge didn't perform well

Nice video from Greenwood, but I went to their website and was not really impressed by their track record. So I am not so sure if their analysis is of great value.

I'm not sure anyone should rely on track records to influence perceptions of analysis.  The analysis should probably rest on its own -- FWIW, I think their analysis is pretty good.

Hedge?

Nice video from Greenwood, but I went to their website and was not really impressed by their track record. So I am not so sure if their analysis is of great value.

I'm not sure anyone should rely on track records to influence perceptions of analysis.  The analysis should probably rest on its own -- FWIW, I think their analysis is pretty good.

Investing is more art than science. The track record of a person is therefore essential. I have seen too many brilliantly written and documented reports which turned out to be lousy investment ideas. My personal knowledge about the car industry is limited so I cannot judge if this analysis (which seems very good) is complete or if some important facts are omitted. I therefore have to rely on past performance of the author.   

There is some danger in this as it would have, at one point, given weight to Bill Miller at a time when you really shouldn't have given his analysis much weight -- so the problem actually cuts both ways.  In any case, if I'm reading you right, it's possible that you're saying that the auto industry is currently outside of your circle of competence -- in which case, you probably shouldn't follow anyone (regardless of their track record) into an investment in the industry.
Title: Re: FIATY - Fiat S.p.A.
Post by: steph on January 05, 2014, 09:25:52 AM
There is some danger in this as it would have, at one point, given weight to Bill Miller at a time when you really shouldn't have given his analysis much weight -- so the problem actually cuts both ways.  In any case, if I'm reading you right, it's possible that you're saying that the auto industry is currently outside of your circle of competence -- in which case, you probably shouldn't follow anyone (regardless of their track record) into an investment in the industry.
[/quote]

You are completely right! But I like this Fiat situation and am trying to learn more from all the interesting comments on this board. I just give less weight to those who have unconfirmed track records and more weight to those who have proven to be excellent.......
Title: Re: FIATY - Fiat S.p.A.
Post by: merkhet on January 05, 2014, 09:33:54 AM
I would say that if you read through both the GM and the Fiat threads in their entirety, you could probably get a pretty good sense of the automotive industry.  Read Einhorn's thesis on General Motors from 2010/2011 and read Hayman Capital's presentation on General Motors.  Then take a look at all of Greenwood's writings on Fiat.  Then go through the last few years' conference call transcripts for GM, Ford & Fiat.  That should put you in a pretty decent position to determine whether you understand the industry enough to make an investment in Fiat.
Title: Re: FIATY - Fiat S.p.A.
Post by: Spekulatius on January 05, 2014, 10:22:50 AM
Unless I am missing something FIATY trades at a premium to BMW (in particular if you compare the preferred shares BMW3.DE) for most valuation metrics. Why pay a premium for a far inferior business.

FWIW, in terms if automobile profits, besides the volume angle, the pricing angle is very important (although both go hand in hand to some extend). During the last 3 years, price discounts were fairly small in the US, but there is no reason why they may not get much larger again, if the business becomes more competitive.
Title: Re: FIATY - Fiat S.p.A.
Post by: Packer16 on January 05, 2014, 10:53:41 AM
If you look at the numbers for the Hyman presentation before the Chrysler deal you will see Fiat is cheaper and after the deal it is more so.  It the preferred sell at discount, then it is cheaper but probably at peak margins.  I think the story behind Fiat is that they are not a peak margins and thus can improve going forward.  BTW the Hyundai preferreds are even cheaper yet at less than 1x EBITDA.

Packer
Title: Re: FIATY - Fiat S.p.A.
Post by: plato1976 on January 05, 2014, 11:02:07 AM
Amazing, I thought the Hyundai preferred appreciated quite a lot last year - amazing it's still trading less than 1x EBITDA

If you look at the numbers for the Hyman presentation before the Chrysler deal you will see Fiat is cheaper and after the deal it is more so.  It the preferred sell at discount, then it is cheaper but probably at peak margins.  I think the story behind Fiat is that they are not a peak margins and thus can improve going forward.  BTW the Hyundai preferreds are even cheaper yet at less than 1x EBITDA.

Packer
Title: Re: FIATY - Fiat S.p.A.
Post by: Packer16 on January 05, 2014, 02:35:06 PM
It did but Hyundai has alot of non-operating assets.  Before the appreciation it was probably a net-net.

Packer
Title: Re: FIATY - Fiat S.p.A.
Post by: plato1976 on January 05, 2014, 02:45:00 PM
If you look at its price in 2009, you will wonder if this was one of the cheapest big cap stock EVER in history... the price was 10% of the current price
I don't think Hyundai had a debt crisis in 2009 but I could be wrong

I wish next time I could grasp such an opp

It did but Hyundai has alot of non-operating assets.  Before the appreciation it was probably a net-net.

Packer
Title: Re: FIATY - Fiat S.p.A.
Post by: dowfin1 on January 05, 2014, 06:09:24 PM
The way I look at Fiat and GM is via the car purchasing cycle and pent-up demand.  Peter Lynch has a great description of this in his "Beating the Street" book in Chapter 15.  Car demand has essentially grown slowly over time but is cyclical over time.  Before 2008, there was an oversupply but since then there has been 2008/2009 which reduced demand temporarily and physically destroyed inventory (cash for clunkers).  By my calcs, we still have some pent-up demand to supply.  This may flip in the next few years.  In this case the most levered play would go up the most but you also need excellent management which you have.  If Fiat jumped to the high teens to low 20s, I would seriously consider selling.  Other data points are Morningstar's analysis and Greenwood's case.

Packer

Packer,
In his table, Lynch estimates 15.4m units as the LT trend for 1993.  I assume it's grown at an annual rate since then, perhaps a percentage of the US household formation growth rate.  Do you have a ballpark trend figure (US auto and light truck) for 2013/2014?

If you don't mind sharing, what is your estimate of the current # of units of pent up demand. 

Thanks.  I find your opinions very insightful.

 
Title: Re: FIATY - Fiat S.p.A.
Post by: Packer16 on January 05, 2014, 07:35:11 PM
If we take the average from 2002 to 2007 of LV unit sales we get 16.7 million units.  If we assume LT average is 16m (conservative assumption because total consumption is up about 17% now from the 2002 to 2007 average), then pent up demand is 18.3 m units if we assume LT average is 15m there is pent up demand of 12.3m units.  So based upon these top level numbers we are closer to 1984 in the 1980s cycle.  Another indication he mentions used car prices are firm also.

Packer
Title: Re: FIATY - Fiat S.p.A.
Post by: kmukul on January 05, 2014, 08:00:08 PM
Amazing, I thought the Hyundai preferred appreciated quite a lot last year - amazing it's still trading less than 1x EBITDA

If you look at the numbers for the Hyman presentation before the Chrysler deal you will see Fiat is cheaper and after the deal it is more so.  It the preferred sell at discount, then it is cheaper but probably at peak margins.  I think the story behind Fiat is that they are not a peak margins and thus can improve going forward.  BTW the Hyundai preferreds are even cheaper yet at less than 1x EBITDA.

Packer

Why not buy Hyundai at at less then 1X ebidta, its cheaper then FIATY and a very well known and respected brand for most of world esp asia (china and india)
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on January 05, 2014, 10:23:42 PM
Amazing, I thought the Hyundai preferred appreciated quite a lot last year - amazing it's still trading less than 1x EBITDA

If you look at the numbers for the Hyman presentation before the Chrysler deal you will see Fiat is cheaper and after the deal it is more so.  It the preferred sell at discount, then it is cheaper but probably at peak margins.  I think the story behind Fiat is that they are not a peak margins and thus can improve going forward.  BTW the Hyundai preferreds are even cheaper yet at less than 1x EBITDA.

Packer

Why not buy Hyundai at at less then 1X ebidta, its cheaper then FIATY and a very well known and respected brand for most of world esp asia (china and india)

Which broker allows this? I can't do it with IB. ::)
Title: Re: FIATY - Fiat S.p.A.
Post by: yitech on January 06, 2014, 12:38:34 AM
Amazing, I thought the Hyundai preferred appreciated quite a lot last year - amazing it's still trading less than 1x EBITDA

If you look at the numbers for the Hyman presentation before the Chrysler deal you will see Fiat is cheaper and after the deal it is more so.  It the preferred sell at discount, then it is cheaper but probably at peak margins.  I think the story behind Fiat is that they are not a peak margins and thus can improve going forward.  BTW the Hyundai preferreds are even cheaper yet at less than 1x EBITDA.

Packer

Why not buy Hyundai at at less then 1X ebidta, its cheaper then FIATY and a very well known and respected brand for most of world esp asia (china and india)

I invested in Hyundai Preferred class 1 for a few months and got out because of the limited capacity of the North American plants could not expand enough to take up the demand. As well, the yen headwind will keep on coming as their Japanese rivals can price their products much more competitively due to the Abenomics money printing. That said, Hyundai preferreds are still way too cheap. As Packer mentioned, Hyundai class 3 preferred were a net net half a years ago.
Title: Re: FIATY - Fiat S.p.A.
Post by: jay21 on January 06, 2014, 05:49:28 AM
The Big 3 are "fielding their best cars in a generation while they are saddled with an image for building poor-quality models. To dealers like Stewart, the solution is simple -- cut prices. Yet GM, Ford Motor Co. and Chrysler Group LLC have promised not to sacrifice their growing profitability by falling into old habits of deep discounting."

http://www.bloomberg.com/news/2014-01-06/made-in-america-gets-better-as-price-drives-better-sales.html?cmpid=yhoo

Let's hope the rational pricing continues.  It only takes one guy to undercut for share to make me worried that all will follow.  The article points to the 29k Mercedes being priced lower than some domestics.
Title: Re: FIATY - Fiat S.p.A.
Post by: Avyalake on January 06, 2014, 06:45:59 AM
http://analysisreport.morningstar.com/stock/archive?t=FIATY&region=USA&culture=en-US&productcode=MLE&docId=622689

Our $19 fair value estimate also includes the assumptions that 2014 European new-vehicle demand will remain weak but possibly perk up just a bit in the second half, offset by flat passenger-car demand in the Brazilian market. In addition, cost savings from the Fiat-Chrysler integration should begin to emerge in 2014, masked by continued Italian operating losses, with substantially improved operating leverage building in 2015 and beyond.

Given the stark contrast between our base revenue and EBITDA margin assumptions against management's revenue forecast and EBITDA margin target ranges for a fully integrated Fiat-Chrysler, the $19 fair value estimate generated by our discounted cash-flow model looks very realistic, bolstering our assessment that the market just doesn't get it--meaning that Fiat stock currently trades at a very compelling valuation.
Title: Re: FIATY - Fiat S.p.A.
Post by: nikhil25 on January 06, 2014, 09:16:58 AM
Likely U.S. listing to further sideline Italy in Fiat-Chrysler group
http://www.reuters.com/article/2014/01/05/us-fiat-chrysler-idUSBREA040CM20140105
Title: Re: FIATY - Fiat S.p.A.
Post by: racemize on January 06, 2014, 10:04:57 AM
Likely U.S. listing to further sideline Italy in Fiat-Chrysler group
http://www.reuters.com/article/2014/01/05/us-fiat-chrysler-idUSBREA040CM20140105

what happens to the Milan shares and OTC shares if they do this move?  Do they all consolidate?
Title: Re: FIATY - Fiat S.p.A.
Post by: constructive on January 06, 2014, 11:11:59 AM
Likely U.S. listing to further sideline Italy in Fiat-Chrysler group
http://www.reuters.com/article/2014/01/05/us-fiat-chrysler-idUSBREA040CM20140105

what happens to the Milan shares and OTC shares if they do this move?  Do they all consolidate?

Most likely they would convert the OTC ADRs to shares in a new US holding company, and convert the Italian shares to GDRs.
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on January 06, 2014, 12:23:06 PM
China Urges Chrysler to Fix Jeep Wrangler Problems


http://online.wsj.com/news/articles/SB10001424052702304617404579304101231432362?mod=WSJ_business_whatsNews (http://online.wsj.com/news/articles/SB10001424052702304617404579304101231432362?mod=WSJ_business_whatsNews)
Title: Re: FIATY - Fiat S.p.A.
Post by: Grenville on January 06, 2014, 12:24:20 PM
I'm a little late on this idea. Just starting the diligence. Had a question for board members.

What is the equivalent to the 10K when researching FIATY?

The reason I ask is that in the US, the 10K and annual report are different. One can be a marketing document without all the relevant details. I found the annual report on Fiaty's website. I just want to make sure there isn't another place I should look.

20F I believe.

LC,

Thanks. I couldn't find the 20F for 2012 on the Fiat website. All I find is the annual report.

Ah sorry...I don't think they are required to file a 20F anymore as they are not listed on the NYSE. Only the ADR is. So I believe it is just the annual report and the mid-year (transitional?) report. But their I/R page has regular information releases that are more current as well.

Thanks for the information. That makes sense. I've been slowly working through the 2012 AR.
Title: Re: FIATY - Fiat S.p.A.
Post by: Ian L on January 06, 2014, 12:44:01 PM
Most likely they would convert the OTC ADRs to shares in a new US holding company, and convert the Italian shares to GDRs.

Then the vast majority of the shares would be GDRs, which Im sure many Fiat shareholders would not appreciate. Would there be any reason not to be able to make it a dual listing?
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on January 06, 2014, 01:57:04 PM
Isn't CNHI (the old Fiat Industrial) traded on both the BIT and NYSE?
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on January 06, 2014, 02:18:28 PM
GreenWood Investors said Fiat is heavily shorted in Italy exchange. Does anyone get the data?
Title: Re: FIATY - Fiat S.p.A.
Post by: constructive on January 06, 2014, 04:41:20 PM
Most likely they would convert the OTC ADRs to shares in a new US holding company, and convert the Italian shares to GDRs.

Then the vast majority of the shares would be GDRs, which Im sure many Fiat shareholders would not appreciate. Would there be any reason not to be able to make it a dual listing?

I think you're right, I was wrong.

http://www.foxbusiness.com/industries/2014/01/03/report-fiat-chrysler-aims-for-2014-ipo/

Quote
CNH Industrial (CNHI), Fiat’s sister company that makes heavy machinery and vehicles, would be used as a template for corporate structure. The industrials group is a Netherlands-registered company that is listed in New York and Milan.
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on January 07, 2014, 10:57:39 AM
http://online.wsj.com/news/articles/SB10001424052702304617404579306282588892164?mod=WSJ_business_whatsNews (http://online.wsj.com/news/articles/SB10001424052702304617404579306282588892164?mod=WSJ_business_whatsNews)


Brazil Posts First Drop in Auto Sales in a Decade




Quote
In terms of passenger-car sales, General Motors Co.  was the market leader in December, with 50,845 cars sold.

However, for the year Fiat F.MI  SpA once again was the market leader, selling 604,297 cars in 2013 and 50,581 cars in December.

Volkswagen AG  came in third place for the month but surpassed GM in terms of annual sales. Ford had the fourth-largest share of the market in December as well as for all of 2013.

Title: Re: FIATY - Fiat S.p.A.
Post by: nikhil25 on January 07, 2014, 12:56:33 PM
Fiat's Mirafiori production revamp imminent, say union sources
http://in.reuters.com/article/2014/01/07/us-fiat-mirafiori-idINBREA060YD20140107
Quote
(Reuters) - Fiat (FIA.MI) will begin modifying production lines at its Mirafiori plant in northern Italy very soon, union sources said on Tuesday, suggesting the company is making good on its pledge to safeguard car manufacturing in its domestic market.

Moody's says Fiat's Chrysler purchase to materially weaken liquidity
http://www.reuters.com/article/2014/01/07/fiat-chrysler-moodys-idUSL6N0KH2XP20140107
Quote
"The announced acquisition will materially weaken Fiat's liquidity position at a time when the company is still free cash flow negative," said Falk Frey, Moody's senior vice president and lead analyst for Fiat.
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on January 07, 2014, 01:23:41 PM
GreenWood Investors said Fiat is heavily shorted in Italy exchange. Does anyone get the data?

The BB terminal says that the info is not available for the Borsa Italiano..
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on January 08, 2014, 02:19:06 PM
http://www.forbes.com/sites/halahtouryalai/2014/01/07/the-story-behind-chrysler-and-fiat-and-why-the-stock-is-so-cheap/
Title: Re: FIATY - Fiat S.p.A.
Post by: Sunrider on January 08, 2014, 03:28:04 PM
I'm sorry since this would've almost definitely been asked/answered somewhere in here - but I'm flabbergasted by the Forbes article. Are those numbers correct? 8bn in EBITDA at a roughly 8bn market cap? Seems ridiculously cheap (yes I know there's debt) ... but still, are these figures right? A short answer would be great to tell me whether it's worthwhile continuing to dig around ...

(Disclosure - I've mainly ignored this threat since, as a European, I'm wedded to the thought that Fiat produces pretty much only crap in the mass market. Not a good basis for investment decisions, I know and of course a very sweeping generalisation.)

Thank you!

C.
Title: Re: FIATY - Fiat S.p.A.
Post by: SwedishValue on January 08, 2014, 04:03:30 PM
I didn't check the exact numbers but yes, FIAT trades at a very low EV/EBITDA multiple. However, depreciation is a very real cost for any car manufacturer. Do as you would with any other business and try to estimate the FCF or Owner Earnings of the company going forward and you will get a much more reasonable (but in this case probably still cheap) multiple.
Title: Re: FIATY - Fiat S.p.A.
Post by: goldfinger on January 08, 2014, 04:14:15 PM
Quote
(Disclosure - I've mainly ignored this threat since, as a European, I'm wedded to the thought that Fiat produces pretty much only crap in the mass market. Not a good basis for investment decisions, I know and of course a very sweeping generalisation.)

I think you should review brands and product refresh. Let's say Maserati for example and what they are doing with it, or Jeep... etc...
Title: Re: FIATY - Fiat S.p.A.
Post by: rogermunibond on January 08, 2014, 04:20:30 PM
http://www.ft.com/intl/cms/s/0/e42a07f8-779e-11e3-807e-00144feabdc0.html

Interesting take in the FT on Sergio and Fiat.
Title: Re: FIATY - Fiat S.p.A.
Post by: racemize on January 08, 2014, 05:08:57 PM
http://www.ft.com/intl/cms/s/0/e42a07f8-779e-11e3-807e-00144feabdc0.html

Interesting take in the FT on Sergio and Fiat.

any summary for the lowly non-subscribers?
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on January 08, 2014, 05:19:30 PM
http://www.ft.com/intl/cms/s/0/e42a07f8-779e-11e3-807e-00144feabdc0.html

Interesting take in the FT on Sergio and Fiat.

any summary for the lowly non-subscribers?
Title: Re: FIATY - Fiat S.p.A.
Post by: Kiltacular on January 08, 2014, 07:47:35 PM
http://www.ft.com/intl/cms/s/0/e42a07f8-779e-11e3-807e-00144feabdc0.html

Interesting take in the FT on Sergio and Fiat.

any summary for the lowly non-subscribers?

FYI:  If you register, you can get some number of free articles every month.  (Though, I see in this case fareastwarriors has provided a solution!)
Title: Re: FIATY - Fiat S.p.A.
Post by: xtreeq on January 08, 2014, 10:58:46 PM
http://www.ft.com/intl/cms/s/0/e42a07f8-779e-11e3-807e-00144feabdc0.html

Interesting take in the FT on Sergio and Fiat.

any summary for the lowly non-subscribers?

A way around this problem is to do the following:
Copy article link address -> go to google.com -> paste article address into search field -> the first search result should be the article on FT -> enjoy
Title: Re: FIATY - Fiat S.p.A.
Post by: yadayada on January 08, 2014, 11:35:01 PM
I didn't check the exact numbers but yes, FIAT trades at a very low EV/EBITDA multiple. However, depreciation is a very real cost for any car manufacturer. Do as you would with any other business and try to estimate the FCF or Owner Earnings of the company going forward and you will get a much more reasonable (but in this case probably still cheap) multiple.
isnt the thesis here, that if new car sales start to go up, they will generate more FCF then earnings?
Title: Re: FIATY - Fiat S.p.A.
Post by: SwedishValue on January 09, 2014, 02:15:32 AM
Hi yada, we share a similar background! And yes, that would be part of my thesis if I happen to buy. Another part of the thesis is that you have a LOT of valuable assets within Fiat that as a sum of the parts basis trades at a discount to market value. Third one could possibly be if we expect capex to decrease in the near-term as refurnishments of the product portfolio and uppgrading of Chrysler facilities have allready taken place... The two first thesises i am confortable with now, but I need to understand whether t.3 makes sense before maybe buying.

In the end it all boils down to FCF.. I have this inprint in my head that car manufacturing is a lousy business in general, but I guess the industry is quite different now compared to before all the restructuring.
Title: Re: FIATY - Fiat S.p.A.
Post by: racemize on January 09, 2014, 04:45:00 AM
http://www.ft.com/intl/cms/s/0/e42a07f8-779e-11e3-807e-00144feabdc0.html

Interesting take in the FT on Sergio and Fiat.

any summary for the lowly non-subscribers?

A way around this problem is to do the following:
Copy article link address -> go to google.com -> paste article address into search field -> the first search result should be the article on FT -> enjoy

Ah thanks, I didn't realize that worked for ft too.
Title: Re: FIATY - Fiat S.p.A.
Post by: yadayada on January 09, 2014, 04:53:58 AM
Ex poker player as well? Anyway, I have yet to do serious reading on this. Dont have much time atm. But it seems to me that the FCF argument is based on the replacement cycle. Average age of cars on the road is at all time highs. So pent up demand is what makes this a buy. Even if the age goes up even further and nto much happens in the next 2 years, some day people will have to buy new cars. Same reason I bought ACW. Except there you have the same story with trucks.
Title: Re: FIATY - Fiat S.p.A.
Post by: Sunrider on January 09, 2014, 07:16:11 AM
Has anyone here thought about/traded this through options - I see there are some 2017 calls available trading in Frankfurt and Stuttgart and also a  lot of warrants (all on IB)? Anyone has any experience using these exchanges/products through IB?

Thank you - C.
Title: Re: FIATY - Fiat S.p.A.
Post by: compoundinglife on January 09, 2014, 08:30:42 AM
Has anyone here thought about/traded this through options - I see there are some 2017 calls available trading in Frankfurt and Stuttgart and also a  lot of warrants (all on IB)? Anyone has any experience using these exchanges/products through IB?

Thank you - C.

Interesting. I would assume these are european style options (only exercisable at expiration)? One of the things I was looking forward to in regards to an NYSE listing was the possibility of american style LEAPs.
Title: Re: FIATY - Fiat S.p.A.
Post by: buylowersellhigh on January 09, 2014, 08:34:34 AM
Do the american style options start trading with concurrent NYSE listing?  When is listing expected?
Title: Re: FIATY - Fiat S.p.A.
Post by: buylowersellhigh on January 09, 2014, 08:39:07 AM
Has anyone here thought about/traded this through options - I see there are some 2017 calls available trading in Frankfurt and Stuttgart and also a  lot of warrants (all on IB)? Anyone has any experience using these exchanges/products through IB?

Thank you - C.

Interesting. I would assume these are european style options (only exercisable at expiration)? One of the things I was looking forward to in regards to an NYSE listing was the possibility of american style LEAPs.

According to Reuters article, listing not expected till early 2015...
Title: Re: FIATY - Fiat S.p.A.
Post by: skanjete on January 09, 2014, 09:33:42 AM
I just finished reading "Mondo Agnelli".
I learned more from "Once upon a car", but "Mondo Agnelli" gives some more background information on FIAT, the Agnelli family, the culture, and especially the figure of Marchionne.
The more I read about him, the more impressed I get.
Title: Re: FIATY - Fiat S.p.A.
Post by: compoundinglife on January 09, 2014, 10:28:30 AM
Has anyone here thought about/traded this through options - I see there are some 2017 calls available trading in Frankfurt and Stuttgart and also a  lot of warrants (all on IB)? Anyone has any experience using these exchanges/products through IB?

Thank you - C.

Interesting. I would assume these are european style options (only exercisable at expiration)? One of the things I was looking forward to in regards to an NYSE listing was the possibility of american style LEAPs.

According to Reuters article, listing not expected till early 2015...

Yeah I noticed that. I was hoping like the Chrysler deal completion that the NYSE listing happens faster than expected. But I guess we shall see, if it takes till 2015 then likely wont be as attractive as they would be now.
Title: Re: FIATY - Fiat S.p.A.
Post by: Sunrider on January 09, 2014, 11:39:18 AM
Not really - seems that some are American style. I was poking around the website of the Stuttgart exchange yesterday and I think I saw some options or warrants listed by Societe Generale that were American exercise (for Fiat). In any event - I think unless you really want to exercise early then European/American shouldn't matter too much to you as the option is basically a leveraged long on the stock one way or the other and both styles should behave similarly (especially this far out).

Cheers - C.

Has anyone here thought about/traded this through options - I see there are some 2017 calls available trading in Frankfurt and Stuttgart and also a  lot of warrants (all on IB)? Anyone has any experience using these exchanges/products through IB?

Thank you - C.

Interesting. I would assume these are european style options (only exercisable at expiration)? One of the things I was looking forward to in regards to an NYSE listing was the possibility of american style LEAPs.

According to Reuters article, listing not expected till early 2015...
Title: Re: FIATY - Fiat S.p.A.
Post by: one-foot-hurdles on January 09, 2014, 12:19:05 PM
http://www.ft.com/intl/cms/s/0/e42a07f8-779e-11e3-807e-00144feabdc0.html

Interesting take in the FT on Sergio and Fiat.

GreenWood Investors rebuttal: http://www.gwinvestors.com/Main/Blog/Entries/2014/1/9_Earth_to_Media__The_Fiat_Fun_Has_Just_Begun.html (http://www.gwinvestors.com/Main/Blog/Entries/2014/1/9_Earth_to_Media__The_Fiat_Fun_Has_Just_Begun.html)
Title: Re: FIATY - Fiat S.p.A.
Post by: paologorgo on January 09, 2014, 03:09:25 PM
it sounds like Mr. Marchionne gave a long interview about Fiat's future which will be published on tomorrow's "Repubblica" printed edition.

http://www.repubblica.it/economia/2014/01/09/news/intervista_a_marchionne-75530856/?ref=HREA-1

Available in a few hours.
Title: Re: FIATY - Fiat S.p.A.
Post by: LC on January 09, 2014, 03:13:54 PM
Thanks Paolo.
Title: Re: FIATY - Fiat S.p.A.
Post by: paologorgo on January 10, 2014, 12:50:48 AM
Enjoy (in Italian)
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on January 10, 2014, 04:19:01 AM
Enjoy (in Italian)

thanks Paolo. for all of you that dont speak italian here in this link are some Points from the interview in english.

http://www.autonews.com/article/20140110/COPY01/301109966/fiat-may-issue-bond-to-boost-liquidity-after-chrysler-merger#axzz2pvmo5plG

Sergio make great comments for me.

"A capital hike [at Fiat] would be value destructive. There are different ways to finance investments … a convertible bond could be an appropriate solution,"

Marchionne told La Repubblica: "We will have a new plan and new models we announce in April. At that time, we will see where our debt level is. I'm not worried [by the debt] at all."

Title: Re: FIATY - Fiat S.p.A.
Post by: MYDemaray on January 10, 2014, 06:37:52 AM
Translated link to article: http://translate.google.com/translate?hl=en&sl=it&tl=en&u=http%3A%2F%2Fwww.repubblica.it%2Feconomia%2F2014%2F01%2F09%2Fnews%2Fintervista_a_marchionne-75530856%2F
Title: Re: FIATY - Fiat S.p.A.
Post by: investor-man on January 10, 2014, 07:28:15 AM
Translated link to article: http://translate.google.com/translate?hl=en&sl=it&tl=en&u=http%3A%2F%2Fwww.repubblica.it%2Feconomia%2F2014%2F01%2F09%2Fnews%2Fintervista_a_marchionne-75530856%2F

I think I have a better chance of understanding the Italian ;)
Title: Re: FIATY - Fiat S.p.A.
Post by: MYDemaray on January 10, 2014, 07:38:46 AM
Translated link to article: http://translate.google.com/translate?hl=en&sl=it&tl=en&u=http%3A%2F%2Fwww.repubblica.it%2Feconomia%2F2014%2F01%2F09%2Fnews%2Fintervista_a_marchionne-75530856%2F

I think I have a better chance of understanding the Italian ;)

Haha...no joke
Title: Re: FIATY - Fiat S.p.A.
Post by: nikhil25 on January 10, 2014, 07:54:44 AM
Fiat Likely to Seek Fresh Financing
Investment Needed to Kick-Start New Industrial Plan
http://online.wsj.com/news/articles/SB10001424052702303393804579312172301096660

Quote
Fiat said it could raise the money through a convertible bond, although it ruled out a capital increase. Analysts say the car maker, which becomes the world's seventh largest with Chrysler, could raise at least €1 billion ($1.36 billion)
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on January 10, 2014, 07:59:45 AM
Euhm... Marchionne's response in the italian interview is:

Q: Possibility of capital increase?
A: That would be a destruction of value, there are other methods to finance our investments.
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on January 10, 2014, 09:04:21 AM
Fiat Likely to Seek Fresh Financing
Investment Needed to Kick-Start New Industrial Plan
http://online.wsj.com/news/articles/SB10001424052702303393804579312172301096660

Quote
Fiat said it could raise the money through a convertible bond, although it ruled out a capital increase. Analysts say the car maker, which becomes the world's seventh largest with Chrysler, could raise at least €1 billion ($1.36 billion)


Fiat will build new models for Alfa Romeo in Italy as part of a strategy to use up excess production capacity in its home country by making cars for premium brands for export. This is being closely watched by unions and politicians because of the large number of jobs involved. Fiat has already assigned new money and models to most of its plants, but the plan to be presented in April will provide even more detail. Fiat is operating at less than 50% capacity in Italy.
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on January 10, 2014, 12:46:48 PM
Quote
Chrysler Raised One Level to BB- From B+ by S&P, Outlook Stable via @BloombergNews
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on January 10, 2014, 01:47:17 PM

Chrysler Weighs Jeep Expansion

Quote
Sergio Marchionne, head of Chrysler and its parent, Italy's Fiat F.MI -0.59% SpA, has said he wants to expand the Jeep sport-utility brand into a global player by expanding sales internationally. World-wide sales hit a record last year of 731,565, up 4% from the previous year, the company said this week.


http://online.wsj.com/news/articles/SB10001424052702303754404579312582224964184 (http://online.wsj.com/news/articles/SB10001424052702303754404579312582224964184)
Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on January 10, 2014, 02:56:26 PM
the cinquecento - It looks so good, you want you taste it.

http://www.mirror.co.uk/news/uk-news/drunk-rhian-jeremiah-bites-car-3006702
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on January 12, 2014, 09:37:22 PM
Chrysler Targets Top Midsize Cars With New 200

http://www.nytimes.com/aponline/2014/01/13/business/ap-us-auto-show-chrysler-200.html?src=busln (http://www.nytimes.com/aponline/2014/01/13/business/ap-us-auto-show-chrysler-200.html?src=busln)

Quote
The redesigned 200 built on underpinnings from Fiat, Chrysler's Italian owner — but is distinctly American.

The car has a roomy interior, quieter engine and sculpted body that should make it competitive in the biggest part of the U.S. auto market. Chrysler is aiming to take sales from the Toyota Camry, Ford Fusion and Honda Accord.
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on January 12, 2014, 09:50:46 PM
Chrysler Updates Old Design

http://online.wsj.com/news/articles/SB10001424052702303754404579310990830350528?mod=WSJ_LatestHeadlines (http://online.wsj.com/news/articles/SB10001424052702303754404579310990830350528?mod=WSJ_LatestHeadlines)
Title: Re: FIATY - Fiat S.p.A.
Post by: brker_guy on January 12, 2014, 10:35:37 PM
Here is the article of it from Auto News with nice pix to match:

http://www.autonews.com/article/20140113/OEM04/140119971/revamped-200-gives-chrysler-hope-for-gaining-on-mid-sized-rivals?cciid=email-autonews-blast&r=2994C8377578D8V#axzz2qG1qylDi

Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on January 13, 2014, 02:49:40 AM
Here is the article of it from Auto News with nice pix to match:

http://www.autonews.com/article/20140113/OEM04/140119971/revamped-200-gives-chrysler-hope-for-gaining-on-mid-sized-rivals?cciid=email-autonews-blast&r=2994C8377578D8V#axzz2qG1qylDi



very nice car! and a very good Price entry Point for the customers
Title: Re: FIATY - Fiat S.p.A.
Post by: skanjete on January 13, 2014, 05:53:08 AM
Great news :

"Fiat Chairman says Marchionne to stay for at least 3 years
Reuters
16 minutes ago
 
DETROIT/MILAN, Jan 13 (Reuters) - Sergio Marchionne will remain at the helm of Fiat at least for the three years necessary to oversee the completion of the car maker's next business plan, Chairman John Elkann said on Monday.

The Italian press has speculated Marchionne could leave after the presentation of the business plan in April or May following a long-pursued deal this month that handed the Turin-based group full control over its U.S. unit Chrysler.

Speaking to journalists in Detroit, Elkann said Marchionne would not be replaced for another three years at least.

Asked about Marchionne's succession, Elkann said: "Not before three years."

Marchionne had earlier said organisational details and where to locate the legal headquarters of the merged company would be discussed at a Fiat board meeting on Jan. 29."
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on January 13, 2014, 05:56:44 AM
Great news :

"Fiat Chairman says Marchionne to stay for at least 3 years
Reuters
16 minutes ago
 
DETROIT/MILAN, Jan 13 (Reuters) - Sergio Marchionne will remain at the helm of Fiat at least for the three years necessary to oversee the completion of the car maker's next business plan, Chairman John Elkann said on Monday.

The Italian press has speculated Marchionne could leave after the presentation of the business plan in April or May following a long-pursued deal this month that handed the Turin-based group full control over its U.S. unit Chrysler.

Speaking to journalists in Detroit, Elkann said Marchionne would not be replaced for another three years at least.

Asked about Marchionne's succession, Elkann said: "Not before three years."

Marchionne had earlier said organisational details and where to locate the legal headquarters of the merged company would be discussed at a Fiat board meeting on Jan. 29."

i like it very much!!!!!! indeed great News
Title: Re: FIATY - Fiat S.p.A.
Post by: Yours Truly on January 13, 2014, 06:22:36 AM
Hopefully this will expediate the listing of a chrysler IPO on the NYSE and create more visibility for the company
Title: Re: FIATY - Fiat S.p.A.
Post by: GregS on January 13, 2014, 10:13:18 AM
When asked by CNBC about a Chrysler IPO, Marchionne said "a listing in the US market is possible" and said it will be discussed with the Board at the end of January.

I read this to say he might be thinking more about a US listing for Fiat, and that it could happen soon.  But I assume all options would be discussed.
Title: Re: FIATY - Fiat S.p.A.
Post by: nikhil25 on January 13, 2014, 11:33:57 AM
Marchionne: top-selling U.S. Fiat dealers to get first batch of Alfas
http://www.reuters.com/article/2014/01/13/us-autoshow-fiat-alfa-idUSBREA0C15H20140113
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on January 13, 2014, 12:36:57 PM
http://www.theglobeandmail.com/report-on-business/chrysler-eyes-1-billion-investment-in-windsor-minivan-plant/article16298240/?cmpid=rss1
Title: Re: FIATY - Fiat S.p.A.
Post by: brker_guy on January 13, 2014, 03:24:22 PM
Another nice article about the Chrysler 200 model:

http://www.forbes.com/sites/joannmuller/2014/01/13/chryslers-stunning-new-200-finally-does-justice-to-eminems-super-bowl-ad/?partner=yahootix

Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on January 13, 2014, 03:40:05 PM
I thought Eminem's Super Bowl commercial was amazing.
Title: Re: FIATY - Fiat S.p.A.
Post by: compoundinglife on January 13, 2014, 03:43:58 PM
I have been very impressed with the Dodge/Chrysler ads I have seen. The Ford ads I have seen recently seem very uninspired and out of touch. But thats just me.
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on January 13, 2014, 04:02:08 PM
Quote
Chrysler’s Detroit Skyline is GM-Free

http://blogs.wsj.com/corporate-intelligence/2014/01/13/chryslers-detroit-skyline-is-gm-free/?mod=WSJ_LatestHeadlines (http://blogs.wsj.com/corporate-intelligence/2014/01/13/chryslers-detroit-skyline-is-gm-free/?mod=WSJ_LatestHeadlines)

seems a bit silly
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on January 13, 2014, 11:13:38 PM
Fiat Starts to Rethink Roles of Its Brands


http://online.wsj.com/news/articles/SB10001424052702304549504579319513509330206?mod=WSJ_hp_LEFTWhatsNewsCollection
 (http://online.wsj.com/news/articles/SB10001424052702304549504579319513509330206?mod=WSJ_hp_LEFTWhatsNewsCollection)

Quote


Fiat is starting to rethink the roles of its multiple brands now that it is about to fully combine with Chrysler Group LLC, starting with the model lineups for its Chrysler and Dodge brands in the U.S.

The Chrysler brand has suspended plans for a small car called the Chrysler 100 for the near term, preferring to focus on its existing portfolio of three models including the Town & Country minivan, a top executive said in an interview at the Detroit auto show.

"As far as I'm concerned, the 100 doesn't happen in the short term," said Al Gardner, who took over as the Chrysler brand's chief executive in November.

"The next thing we look at is what to do next with the 300, and then what do we do with the Town & Country," he said, mentioning two of the three models in its portfolio. The third one is the 200, a new version of which was shown at the show.

Sergio Marchionne, Fiat's CEO, has suggested that the combined company wants to reduce overlap between the Chrysler and Dodge brands.

The Town & Country is one of two minivans within the overall Chrysler group of brands. The other is the Dodge Caravan. Mr. Marchionne has said only one of these two would survive. That has prompted speculation about which brand would ultimately get the next-generation minivan.

The move would be significant for a company that once built much of its market share and profits on sales of two minivan models. In recent years, however, demand for minivans has fallen as more families have opted for larger sport-utility vehicles that also have three rows of passenger seats.

At a news conference Monday, Mr. Marchionne said Chrysler expects to make a final decision on where to build the next-generation minivan during this quarter. The current ones are made at Chrysler's factory in Windsor, Ontario.

"We are 95% there on the styling of the vehicle," he said. "That's a tremendous move forward."

Mr. Marchionne, however, said the question of where the next minivan will be built isn't settled and is subject to talks with the Canadian Auto Workers union and Canadian government officials.

Unit sales of Chrysler's namesake brand fell 2% to 302,492 in 2013.

The auto maker is banking on the rollout of the new version of the Chrysler 200 sedan to help reverse that slide.

The auto maker also had planned to add a Chrysler-brand crossover, but that vehicle has yet to arrive. Mr. Gardner said the company decided against the Chrysler 100 because it already has the compact Dodge Dart, which fills a similar niche. The Chrysler 100 was also to be a hatchback, a body style that tends to get a lukewarm reception from U.S. buyers.

Chrysler had shown dealers the Chrysler 100 two years ago at a meeting in Las Vegas.

"It's a great product but not when you look at it from a financial perspective," he said.

When asked about the future of the Chrysler brand's lineup, Mr. Gardner acknowledged the need to expand the brand, but gave no specifics on the timing. "Would I love to have a fourth model? Sure, but I've got three vehicles which are my primary focus," he said.

Mr. Marchionne indicated that Fiat's Lancia brand will also be slimmed down. The Chrysler brand will no longer supply models in Europe for Lancia, based in Italy. Chrysler's models, including the 300, have failed to help Lancia gain any ground in Europe. The vehicles were too big to win over buyers who traditionally prefer smaller cars and live in countries, such as Italy, where larger engines are taxed heavily.

Mr. Marchionne said Lancia would focus on selling its Ypsilon city car, most of which are sold in Italy.

For the first 11 months of 2013, Lancia sales fell 21.5% to 68,223 vehicles in the European Union.
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on January 14, 2014, 05:27:14 AM
http://www.bloomberg.com/news/2014-01-13/chrysler-says-jeep-to-reach-1-million-sales-worldwide-by-2015.html
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on January 14, 2014, 06:42:50 AM

Fiat CEO Sets Out His Priorities

Goals in Merger With Chrysler Include Taking Jeep Global


http://online.wsj.com/news/articles/SB10001424052702303595404579318391646846938 (http://online.wsj.com/news/articles/SB10001424052702303595404579318391646846938)
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on January 14, 2014, 02:59:28 PM
Fiat-Chrysler leans heavily towards US headquarters and listing


http://www.ft.com/intl/cms/s/0/1ea3c6c6-7c77-11e3-9179-00144feabdc0.html#axzz2qIcZZaE0 (http://www.ft.com/intl/cms/s/0/1ea3c6c6-7c77-11e3-9179-00144feabdc0.html#axzz2qIcZZaE0)
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on January 14, 2014, 11:12:43 PM
http://online.wsj.com/news/articles/SB10001424052702304549504579318952857858762?mod=Business_newsreel_2 (http://online.wsj.com/news/articles/SB10001424052702304549504579318952857858762?mod=Business_newsreel_2)

Auto Makers Dare to Boost Capacity

North American Factories Will Build One Million More Cars a Year
Title: Re: FIATY - Fiat S.p.A.
Post by: nikhil25 on January 15, 2014, 06:57:50 AM
AutoNation CEO Says U.S. Vehicle Inventories Too High
CEO Mike Jackson Challenges Auto Makers Over Sales Tactics
http://online.wsj.com/news/articles/SB10001424052702303819704579320991785371828?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702303819704579320991785371828.html

Quote
U.S. dealers have about $100 billion worth of unsold cars and trucks sitting on their lots, Mr. Jackson said. That level is striking given that car makers have pledged not to overstock dealers the way they did in the run-up to the financial crisis and the auto-sales collapse of 2008-2009, Mr. Jackson said. Auto makers book revenue when a car is shipped, not when it is sold at the dealership.

At the end of 2013, auto dealers had 3.45 million cars and trucks in stock, enough to last 63 days at the current selling rate, according to research firm Autodata Corp. A 60-day supply of cars is typically considered as healthy by the industry.

But Mr. Jackson said the inventory levels are much higher than that—closer to 90 to 120 days of supply—if cars sold to fleets are excluded from the selling rate.

AutoNation's Mr. Jackson said discounts are starting to rise across the industry already, even if they aren't as obvious to consumers. Among them are "stair-step programs" where car companies give money directly to dealers in exchange for hitting monthly sales targets.

"What worries me is if the industry was as disciplined as it says it is we would have stopped before 3.5 million" vehicles at dealerships, Mr. Jackson said. He sees about a 50-50 chance the industry will resort to an all-out discount war.
Title: Re: FIATY - Fiat S.p.A.
Post by: racemize on January 15, 2014, 06:59:23 AM
AutoNation CEO Says U.S. Vehicle Inventories Too High
CEO Mike Jackson Challenges Auto Makers Over Sales Tactics

Quote
U.S. dealers have about $100 billion worth of unsold cars and trucks sitting on their lots, Mr. Jackson said. That level is striking given that car makers have pledged not to overstock dealers the way they did in the run-up to the financial crisis and the auto-sales collapse of 2008-2009, Mr. Jackson said. Auto makers book revenue when a car is shipped, not when it is sold at the dealership.

At the end of 2013, auto dealers had 3.45 million cars and trucks in stock, enough to last 63 days at the current selling rate, according to research firm Autodata Corp. A 60-day supply of cars is typically considered as healthy by the industry.

But Mr. Jackson said the inventory levels are much higher than that—closer to 90 to 120 days of supply—if cars sold to fleets are excluded from the selling rate.

AutoNation's Mr. Jackson said discounts are starting to rise across the industry already, even if they aren't as obvious to consumers. Among them are "stair-step programs" where car companies give money directly to dealers in exchange for hitting monthly sales targets.

"What worries me is if the industry was as disciplined as it says it is we would have stopped before 3.5 million" vehicles at dealerships, Mr. Jackson said. He sees about a 50-50 chance the industry will resort to an all-out discount war.

Well, this is extremely disappointing. 
Title: Re: FIATY - Fiat S.p.A.
Post by: yadayada on January 15, 2014, 07:49:36 AM
yeah i supose maybe we should list all the reasons it is so cheap? Haven't actually looked at that .
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on January 15, 2014, 09:08:14 AM
Auto Loans Bring Growth, and Scrutiny, for Banks
http://dealbook.nytimes.com/2014/01/14/auto-loans-bring-growth-and-scrutiny-for-banks/?_r=0 (http://dealbook.nytimes.com/2014/01/14/auto-loans-bring-growth-and-scrutiny-for-banks/?_r=0)
Title: Re: FIATY - Fiat S.p.A.
Post by: plato1976 on January 17, 2014, 05:30:57 AM
Any news ?
Fiat kept rising big these two days in Milan

Auto Loans Bring Growth, and Scrutiny, for Banks
http://dealbook.nytimes.com/2014/01/14/auto-loans-bring-growth-and-scrutiny-for-banks/?_r=0 (http://dealbook.nytimes.com/2014/01/14/auto-loans-bring-growth-and-scrutiny-for-banks/?_r=0)
Title: Re: FIATY - Fiat S.p.A.
Post by: skanjete on January 17, 2014, 07:05:40 AM
There was quite some positive news :

This especially :
http://finance.yahoo.com/news/renault-vw-lead-european-car-070201759.html

http://www.bloomberg.com/news/2014-01-17/chrysler-vehicle-output-rose-16-in-december-fueled-by-cherokee.html?cmpid=yhoo
Title: Re: FIATY - Fiat S.p.A.
Post by: txlaw on January 17, 2014, 07:27:43 AM
http://www.bloomberg.com/news/2014-01-16/fiat-heir-elkann-reshapes-family-legacy-with-chrysler.html
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on January 17, 2014, 08:41:01 AM
There was quite some positive news :

This especially :
http://finance.yahoo.com/news/renault-vw-lead-european-car-070201759.html

http://www.bloomberg.com/news/2014-01-17/chrysler-vehicle-output-rose-16-in-december-fueled-by-cherokee.html?cmpid=yhoo

Green Wood investors have predicted this 3 months back, remember?
Title: Re: FIATY - Fiat S.p.A.
Post by: Ian L on January 19, 2014, 01:09:36 PM
Any news ?
Fiat kept rising big these two days in Milan

Here is the full sales data from Friday. http://www.fiatspa.com/en-US/investor_relations/financial_data/FiatDocuments/Fiat_Chrysler_WW_Sales_Report_December_2013.pdf
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on January 21, 2014, 10:25:54 AM

Fiat Completes Acquisition of Chrysler



http://dealbook.nytimes.com/2014/01/21/fiat-completes-acquisition-of-chrysler/?_php=true&_type=blogs&src=busln&_r=0 (http://dealbook.nytimes.com/2014/01/21/fiat-completes-acquisition-of-chrysler/?_php=true&_type=blogs&src=busln&_r=0)
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on January 23, 2014, 04:57:38 AM
http://www.autonews.com/article/20140122/OEM/301229911/fiat-chrysler-plans-primary-nyse-listing-report-says#axzz2rDsLqSeA
Title: Re: FIATY - Fiat S.p.A.
Post by: DCG on January 23, 2014, 06:04:58 AM
What will happen to those of us holding FIATY ADR shares?
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on January 23, 2014, 08:53:33 AM
What will happen to those of us holding FIATY ADR shares?

Probably similar to Fiat industrial?
Title: Re: FIATY - Fiat S.p.A.
Post by: jm25 on January 23, 2014, 08:54:37 AM
What is price target for the majority of you guys? Stock has run up nicely - are you buyers or sellers at this point?
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on January 23, 2014, 08:57:10 AM
What is price target for the majority of you guys? Stock has run up nicely - are you buyers or sellers at this point?

I am waiting for $20 minimum to even consider selling.
Their margin is still lower than other auto makers. They may have a chance to improve the margin and deliver a better EBITDA.
My current $20 target is based on margin not improving and Alfa Romeo unable to succeed scenario. :)
But it also depends on what other investment opportunities I can find.
Title: Re: FIATY - Fiat S.p.A.
Post by: indirect on January 23, 2014, 08:58:08 AM
Earning will be out tuesday. Expect to blow thro analyst 's estimates.
Title: Re: FIATY - Fiat S.p.A.
Post by: buylowersellhigh on January 23, 2014, 09:02:47 AM
What will happen to those of us holding FIATY ADR shares?

Probably similar to Fiat industrial?

What happened to Fiat industrial?  Just gets moved over to a new ticker?
Title: Re: FIATY - Fiat S.p.A.
Post by: hardcorevalue on January 23, 2014, 11:48:34 AM
Not selling anytime soon. there is just too much upside given the operational and financial leverage.
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on January 23, 2014, 12:59:43 PM
i will also first start thinking about selling when the stock is around 20$.

Company is after this runup still big undervalued. nobody understands the combination of the Group of ferrari, maserati, chrysler and fiat.

Title: Re: FIATY - Fiat S.p.A.
Post by: dutchman on January 25, 2014, 09:10:46 AM
Fiat Chief to Propose U.S. Listing, U.K. Fiscal Residency

http://online.wsj.com/news/articles/SB10001424052702303448204579342420323893610?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702303448204579342420323893610.html
Title: Re: FIATY - Fiat S.p.A.
Post by: dpetrescu on January 25, 2014, 02:36:16 PM
I recently bought a small amount of FIAT and am hoping to keep adding. My only concern is the large runup in price without a decent correction. If I could sell puts I would.
Title: Re: FIATY - Fiat S.p.A.
Post by: dpetrescu on January 25, 2014, 02:37:52 PM
For an off-topic question, has anyone looked into Toyota (TM)?

I think it was Buffet or Klarman who told a story of how they invested, by calling up multiple companies and asking them who their best competitor is and a common answer typically emerges. I've been watching some interviews with Marchionne and he has mentioned Toyota multiple times....TM as one of the best, FIAT stealing certain approaches from TM, TM as very efficient with standards (story about the horn - TM has one horn for all models. If a designer wants to change the horn for one model, they would have to go through the TM CEO. Fiat has too many horn types which is inefficient. American autos are even worse)

It's at a PE or 13, forward estimated PE of 10. It also has one big potential headwind that other automakers do not. 50% of production is exported from Japan. If you believe Abenomics will continue, this gives TM an edge.
Title: Re: FIATY - Fiat S.p.A.
Post by: Ian L on January 29, 2014, 02:35:49 AM
Q4 and FY results

http://www.fiatspa.com/en-US/media_center/FiatDocuments/2014/Gennaio/FIAT_S_P_A_BOARD_OF_DIRECTORS_MEETING_2013_FULL_YEAR_AND_FOURTH_QUARTER_RESULTS.pdf
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on January 29, 2014, 03:11:18 AM
Q4 and FY results

http://www.fiatspa.com/en-US/media_center/FiatDocuments/2014/Gennaio/FIAT_S_P_A_BOARD_OF_DIRECTORS_MEETING_2013_FULL_YEAR_AND_FOURTH_QUARTER_RESULTS.pdf

stock is down because the guidance for 2014 is under the expectation from the analysts. still nobody understands the fiat/chrysler Story  :)
Title: Re: FIATY - Fiat S.p.A.
Post by: bmichaud on January 29, 2014, 03:21:44 AM
Buy the dips :)
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on January 29, 2014, 03:23:57 AM
Buy the dips :)

exactly :)
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on January 29, 2014, 04:59:18 AM
http://www.4-traders.com/FIAT-SPA-69342/news/Fiat-SpA--Fiat-Chrysler-creates-Dutch-holding-sets-tax-domicile-in-UK-17851401/
Title: Re: FIATY - Fiat S.p.A.
Post by: racemize on January 29, 2014, 05:23:42 AM
I wonder how fast they will go for the US listing?  Seems like they are on track for faster than 2015?  Will the ADR people need to do anything to convert over?  (I think this has been asked, but I don't remember an answer)
Title: Re: FIATY - Fiat S.p.A.
Post by: karthikpm on January 29, 2014, 06:34:32 AM
Their announcement says it will be a 1:1 conversion for the common share.
Title: Re: FIATY - Fiat S.p.A.
Post by: racemize on January 29, 2014, 06:35:38 AM
Their announcement says it will be a 1:1 conversion for the common share.

Ah, must have missed that part, thanks very much!
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on January 29, 2014, 06:36:53 AM
http://www.4-traders.com/FIAT-SPA-69342/news/Fiat-SpA--Chrysler-CEO-seeks-US-listing-for-merged-group-as-of-October-1-17852048/
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on January 29, 2014, 08:34:16 AM
http://www.twst.com/update/37743-fiat-spa-reorganizes-after-completion-of-the-purchase-of-chrysler-group-llc

"In order to foster the development and continued involvement of a core base of long- term shareholders, FCA will adopt a loyalty voting structure, under which Fiat shareholders who are present or represented by proxy at the Fiat shareholder meeting called to vote on the proposal and who continue to hold their shares until the closing, regardless of how they vote, are eligible to receive special voting shares equivalent in number to the newly-issued FCA common shares they receive."

What the fuck does this mean? I bought their shares early last year, and I bought more last December. I have never voted in the proxy. Does this mean someone else who have voted in the proxy will receive the special voting shares but I will not? Is this a form of dilution? :o

"After the closing, shareholders who hold their FCA common shares for at least three years would also be entitled to participate in the loyalty voting structure.
FCA shareholders will be eligible for loyalty voting until they transfer their common shares."
Does this mean if we hold our shares for 3 years, we will receive the special voting share? Does that also trade in the stock exchange and have some value to sell? ::) It sounds like if the share is sold, the special voting share will be forfeited, so probably this mean the speial voting share will not trade in the NYSE and will not have value?
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on January 29, 2014, 09:31:02 AM
Fiat Cuts 2014 Profit Target as Carmaker Plans NY Listing




http://www.bloomberg.com/news/2014-01-29/fiat-s-fourth-quarter-profit-misses-estimates-on-latin-america.html (http://www.bloomberg.com/news/2014-01-29/fiat-s-fourth-quarter-profit-misses-estimates-on-latin-america.html)
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on January 29, 2014, 10:07:16 AM
Fiat Scraps Dividend After Chrysler Buy


http://online.wsj.com/news/articles/SB10001424052702303973704579350251966278792 (http://online.wsj.com/news/articles/SB10001424052702303973704579350251966278792)
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on January 29, 2014, 10:41:36 AM
Fiat Scraps Dividend After Chrysler Buy


http://online.wsj.com/news/articles/SB10001424052702303973704579350251966278792 (http://online.wsj.com/news/articles/SB10001424052702303973704579350251966278792)

good step. they should save all Money and put in the new Company, new products and so on. when they make the right steps they can intiate the dividend in 1-2years again
Title: Re: FIATY - Fiat S.p.A.
Post by: Lazarus Long on January 29, 2014, 10:44:07 AM

What the fuck does this mean? I bought their shares early last year, and I bought more last December. I have never voted in the proxy. Does this mean someone else who have voted in the proxy will receive the special voting shares but I will not? Is this a form of dilution? :o


I don't think the issuance of the special voting shares will be dilutive. Fiat Industrial did something similar: see http://www.sec.gov/Archives/edgar/data/1024519/000119312513283773/d564825d425.htm (http://www.sec.gov/Archives/edgar/data/1024519/000119312513283773/d564825d425.htm). In Fiat Industrial's case, the special voting shares had "only minimal economic entitlements" that Fiat Industrial said were "immaterial for investors."
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on January 29, 2014, 11:07:25 AM
Fiat Chrysler’s Problems – Scale and Scope


http://blogs.wsj.com/moneybeat/2014/01/29/fiat-chryslers-problems-scale-and-scope/ (http://blogs.wsj.com/moneybeat/2014/01/29/fiat-chryslers-problems-scale-and-scope/)
Title: Re: FIATY - Fiat S.p.A.
Post by: racemize on January 29, 2014, 11:15:12 AM
Fiat Chrysler’s Problems – Scale and Scope


http://blogs.wsj.com/moneybeat/2014/01/29/fiat-chryslers-problems-scale-and-scope/ (http://blogs.wsj.com/moneybeat/2014/01/29/fiat-chryslers-problems-scale-and-scope/)

Does the author have no concept of profit?  Who cares if they sell less cars if they make a bunch of money from the premium ones...
Title: Re: FIATY - Fiat S.p.A.
Post by: valueInv on January 29, 2014, 11:48:48 AM
Fiat Chrysler’s Problems – Scale and Scope


http://blogs.wsj.com/moneybeat/2014/01/29/fiat-chryslers-problems-scale-and-scope/ (http://blogs.wsj.com/moneybeat/2014/01/29/fiat-chryslers-problems-scale-and-scope/)

Does the author have no concept of profit?  Who cares if they sell less cars if they make a bunch of money from the premium ones...

Hmmm....that sounds familiar......
Title: Re: FIATY - Fiat S.p.A.
Post by: txlaw on January 29, 2014, 12:39:48 PM
Letter to the troops:
http://www.autonews.com/article/20140129/OEM02/140129758/marchionne-letter-to-chrysler-employees
Title: Re: FIATY - Fiat S.p.A.
Post by: Grenville on January 29, 2014, 12:52:47 PM
Letter to the troops:
http://www.autonews.com/article/20140129/OEM02/140129758/marchionne-letter-to-chrysler-employees

Thanks for posting!

I also thought this letter in the FIAT releases from today was very good and covered a number of things:
http://www.fiatspa.com/en-US/media_center/FiatDocuments/2014/Gennaio/Fiat_S_p_A_reorganizes_after_completion_of_the_purchase_of_Chrysler_Group_LLC.pdf (http://www.fiatspa.com/en-US/media_center/FiatDocuments/2014/Gennaio/Fiat_S_p_A_reorganizes_after_completion_of_the_purchase_of_Chrysler_Group_LLC.pdf)
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on January 29, 2014, 02:24:04 PM




Fiat / Chrysler: ease off brakes slowly

Globalisation is very convenient. Fiat, now outright owner of US-based automaker Chrysler, is taking full advantage as it restructures the merged group. The tax residence shifts to the UK; nation of incorporation, to the Netherlands; the main share listing, to New York. For all the pledges about local jobs, it is tough luck, Turin.


Investors, like management, should be satisfied, but not overly excited. Wednesday’s earnings were a sharp reminder that securing the buyout of the Chrysler minority is just one step in tackling Fiat’s problems. The automaker’s €3.4bn trading profit in 2013 was essentially flat, year on year, at constant exchange rates – and in the last three months, disappointingly short of the market’s consensus estimates.
 
Problems, of course, are mainly on the Fiat side: without Chrysler, its 2013 net loss would have been 15 per cent higher, at more than €900m. A good part of this reflects weakness in Latin America, where group earnings before tax and interest more than halved last year. Fiat’s mass-market brands continued to suffer in Europe, too. These trends look likely to hold back the pace of recovery: Fiat is now guiding to €3.6bn-€4bn trading profit in 2014. The market had been hoping for more than €4.1bn.
 
All that said, the balance sheet could have been worse. Industrial net debt ended the year at €6.6bn and is expected to be about €10bn at end-2014 (after the Chrysler deal). That is about €1bn less than many investors feared.

Even so, if Latin America remains weak, demand in southern Europe stays sluggish and capital spending fairly high, the capital structure may need to be addressed. Fiat boss Sergio Marchionne denies plans for a rights issue and hints vaguely at more creative options. But until the road ahead becomes clearer on all these fronts, investors may want to release the brakes only slowly.




http://www.ft.com/intl/cms/s/3/8925431e-88eb-11e3-bb5f-00144feab7de.html?siteedition=intl#axzz2rWwocgZN (http://www.ft.com/intl/cms/s/3/8925431e-88eb-11e3-bb5f-00144feab7de.html?siteedition=intl#axzz2rWwocgZN)
Title: Re: FIATY - Fiat S.p.A.
Post by: ZenaidaMacroura on January 29, 2014, 03:20:28 PM
Their announcement says it will be a 1:1 conversion for the common share.
Can you link the release?

I presume this will happen automatically- does this event book ADR profits (incur cap gain tax)?
Title: Re: FIATY - Fiat S.p.A.
Post by: jch548 on January 29, 2014, 03:35:42 PM
I sold my shares today. Didn't like the profit guidance and the market is looking a bit sick. Needed to built up more cash incase things get cheaper.

With the profit hit the cash burn will be worse for Fiat. It could be they won't be cash flow positive for a few years. I'm just going to watch this one for now.
Title: Re: FIATY - Fiat S.p.A.
Post by: karthikpm on January 29, 2014, 05:04:41 PM
http://www.fiatspa.com/en-US/investor_relations/investors/risultati_trimestrali/FiatDocuments/2013/Q4_FY_2013_Results.pdf

Slide deck has the details.. Slide no 4 has details of the re-org plan..

Title: Re: FIATY - Fiat S.p.A.
Post by: txlaw on January 30, 2014, 07:30:48 AM
http://www.bloomberg.com/news/2014-01-29/maserati-boom-signals-fiat-arrivederci-to-italian-past.html
Title: Re: FIATY - Fiat S.p.A.
Post by: Grenville on January 30, 2014, 07:46:38 AM
Good interview with John Elkann in La Stampa today. It's in Italian.

http://www.lastampa.it/2014/01/30/economia/elkann-per-lauto-futuro-pi-solido-io-resto-qui-al-lingotto-71JW468miwjDOuhTepvm3N/pagina.html (http://www.lastampa.it/2014/01/30/economia/elkann-per-lauto-futuro-pi-solido-io-resto-qui-al-lingotto-71JW468miwjDOuhTepvm3N/pagina.html)
Title: Re: FIATY - Fiat S.p.A.
Post by: txlaw on January 30, 2014, 08:07:55 AM
Good interview with John Elkann in La Stampa today. It's in Italian.

http://www.lastampa.it/2014/01/30/economia/elkann-per-lauto-futuro-pi-solido-io-resto-qui-al-lingotto-71JW468miwjDOuhTepvm3N/pagina.html (http://www.lastampa.it/2014/01/30/economia/elkann-per-lauto-futuro-pi-solido-io-resto-qui-al-lingotto-71JW468miwjDOuhTepvm3N/pagina.html)

Do you understand Italian or did you just use Google Translate?
Title: Re: FIATY - Fiat S.p.A.
Post by: Grenville on January 30, 2014, 08:16:40 AM
Good interview with John Elkann in La Stampa today. It's in Italian.

http://www.lastampa.it/2014/01/30/economia/elkann-per-lauto-futuro-pi-solido-io-resto-qui-al-lingotto-71JW468miwjDOuhTepvm3N/pagina.html (http://www.lastampa.it/2014/01/30/economia/elkann-per-lauto-futuro-pi-solido-io-resto-qui-al-lingotto-71JW468miwjDOuhTepvm3N/pagina.html)

Do you understand Italian or did you just use Google Translate?
I wish...used google translate, haha...
Title: Re: FIATY - Fiat S.p.A.
Post by: MYDemaray on January 30, 2014, 08:58:21 AM
From the La Stampa article as a sort of rebuttal to the WSJ piece:

Q: But are conceivable new business alliance to increase the volume? 
Elkann: "The volume as such are not sufficient on its own, so much so that General Motors, despite being the largest car manufacturer in the world, then went bankrupt in 2009. But it is also true that, if it is well managed, have more than one volume is a definite advantage. "

...he gets it
Title: Re: FIATY - Fiat S.p.A.
Post by: bmichaud on January 30, 2014, 01:53:31 PM
Stating the obvious I know, but Marchionne is just phenomenal. I loved this quote on page 31 of the transcript:

Quote
I think the next step in fixing Europe is utilization of the industrial network to produce something other than mass market bound cars. We’ve been clear on this issue, we do not see a future for the continuation of this industrial framework to try and satisfy demand in a market which is over-serviced. And so we’re slowly moving our production assets towards that end. You’ve seen from the margins that we’ve been able to extract out of Maserati as to what is potentially doable if these assets are utilized for the right brand for global distribution. I think you need to give us time to continue to develop the rest of our network on that basis. I think at completion of the plan, we will be more than in positive territory. But it’s not going to come from the traditional application of the traditional brands in the European market. It just won’t happen. And I continue to be incredibly negative about the possibility of this market effectively coming back in and producing margins that allow anyone to recover the capital costs associated with the investments. So we had to get out of the sandbox. We’ve had this discussion before. And I’m as convinced now as I’ve ever been about the fact that our strategic direction is correct. But it’s not going to happen out of selling mass market cars, I can tell you, it won’t happen. There’s not enough margin left in the business to try and get that done.


Huge margin potential out of Chrysler too. 2013 MOP was 4.44% of revenue. After net interest expense of 994 and a 40% tax rate, net income is 1,223, or 1.08 per Fiat share. At 8.33X, Chrysler is worth $9 per Fiat share.

GM's North American goal is 10% EBIT margin....at a 7% MOP margin, Chrysler's EPS rises to 1.98, and is worth $16.53 at the same multiple, or $19.85 at 10X.

Sooo much potential here.
Title: Re: FIATY - Fiat S.p.A.
Post by: yadayada on January 30, 2014, 04:45:50 PM
total net income was 2.1 billion in 2013 right? of chrysler and fiat consolidated?
Title: Re: FIATY - Fiat S.p.A.
Post by: investor-man on February 02, 2014, 05:01:29 PM
Not such a great Maserati commercial during the Super Bowl
Title: Re: FIATY - Fiat S.p.A.
Post by: investor-man on February 02, 2014, 05:07:54 PM
Bleh Jeep's commercial was terrible too. They look like they came from the same agency. Time for a new agency
Title: Re: FIATY - Fiat S.p.A.
Post by: argonaut on February 02, 2014, 05:37:29 PM
I actually liked the Maserati commercial...just my .02...jeep was like a Subaru commercial.
Title: Re: FIATY - Fiat S.p.A.
Post by: investor-man on February 02, 2014, 06:07:45 PM
The Chrysler commercial was better. Looked like the same agency as the other two
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on February 03, 2014, 05:05:49 AM
i liked both. the cars are great. ghibli is very nice and the new 200 is amazing.
Title: Re: FIATY - Fiat S.p.A.
Post by: zippy1 on February 03, 2014, 06:17:19 AM
Quote
DETROIT, Feb 3 (Reuters) - Chrysler Group's U.S. January sales rose 8 percent on the strength of its Jeep and Ram truck brands.

Chrysler, a unit of Fiat Chrysler Automobiles, said it expected overall U.S. industry auto sales to be 15.6 million vehicles on a seasonally adjusted annualized basis. The company's forecast includes medium and heavy trucks, which typically account for between 200,000 and 300,000 vehicles annually.

Chrysler's Jeep Cherokee SUV sold five times more vehicles in January than the Jeep Liberty, the model it replaced in the brand's lineup, sold a year ago.
http://finance.yahoo.com/news/chrysler-u-january-sales-8-131707219.html
Title: Re: FIATY - Fiat S.p.A.
Post by: Grenville on February 04, 2014, 10:11:48 AM
Just finished reading Once Upon a Car. Thanks for the book recommendations!

I enjoyed Mondo Agnelli more but Once Upon a Car was a good overview of the big three through the financial crisis. There wasn't much about Sergio or Fiat until the very end of the book.
Title: Re: FIATY - Fiat S.p.A.
Post by: zippy1 on February 05, 2014, 04:05:47 AM
Refinanced high interest rate bond with lower interest rate bond and to save $400million in next 3 years.
http://finance.yahoo.com/news/chrysler-seals-4-8-bln-083956499.html
Quote
MILAN, Feb 5 (Reuters) - Chrysler Group is set to raise about $4.8 billion in debt that will use to repay an existing bond, allowing the U.S. car maker owned by Italy's Fiat to save around $134 million a year in interest costs between 2014 and 2016.

Fiat Chrysler said on Wednesday that U.S. unit Chrysler, now merged into the new FCA group, had priced $1.375 billion in senior debt due in 2019 to yield 6.165 percent. It also priced a $1.38 billion 2021 senior bond to yield 6.433 percent. Both issues are top-ups of existing bonds.

Chrysler also plans to increase an existing term loan by $250 million and to sign a new $1.75 billion secured term loan facility.

The car maker will use all proceeds to repay a bond issued in June 2009 to healthcare trust VEBA for $4.587 billion and pocket total savings of $402 million by 2016.
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on February 05, 2014, 02:45:53 PM
The new Fiat Chrysler faces a rougher road than most think


http://finance.fortune.cnn.com/2014/02/05/fiat-chrysler-pensions/?iid=SF_F_River (http://finance.fortune.cnn.com/2014/02/05/fiat-chrysler-pensions/?iid=SF_F_River)
Title: Re: FIATY - Fiat S.p.A.
Post by: ZenaidaMacroura on February 05, 2014, 03:05:34 PM
The new Fiat Chrysler faces a rougher road than most think


http://finance.fortune.cnn.com/2014/02/05/fiat-chrysler-pensions/?iid=SF_F_River (http://finance.fortune.cnn.com/2014/02/05/fiat-chrysler-pensions/?iid=SF_F_River)
Seems like the writer just really wanted to hammer through his point - the person he contacted seemed to be implying that the pension obligation was already in the equation even when they only owned a majority interest in Chrystler.  It really makes no difference unless they had originally planned to renege in some fashion.

Fortune writer: You realize acquiring the remaining stake makes Fiat liable for Chrystler's Pension shortfall?

Fiat response:  Those obligations have been on Fiat's balance sheet since 2011.  This is not a new concern.

Fortune writer: This is a huge deal!  Whereas previously you were only likely liable, now you're definitely liable.  You guy's are such cowboys. 

Title: Re: FIATY - Fiat S.p.A.
Post by: Grenville on February 05, 2014, 03:38:26 PM
The new Fiat Chrysler faces a rougher road than most think


http://finance.fortune.cnn.com/2014/02/05/fiat-chrysler-pensions/?iid=SF_F_River (http://finance.fortune.cnn.com/2014/02/05/fiat-chrysler-pensions/?iid=SF_F_River)

The article does bring up something I wasn't aware of, pension liability that pierces the corporate veil. I'd like to get separate confirmation of this. In a worst case scenario now that Chrysler is fully owned, the author states that pension liabilities stay with Fiat even if they let Chrysler fall into bankruptcy.

On a related note, when I read Once Upon a Car, Daimler Chrysler was described as being very motivated to get rid of Chrysler. The reasoning was two fold, one the lack of profitability and the other the ballooning healthcare liability. I wonder if this pseudo successor liability was the real reason.
Title: Re: FIATY - Fiat S.p.A.
Post by: Lazarus Long on February 05, 2014, 08:12:04 PM
I believe the Fortune article is correct. A non-U.S. parent company would be liable for pension termination and withdrawal liabilities of U.S. subsidiaries in its controlled group. The "controlled group" test under ERISA is generally 80% ownership. Here is a White & Case note discussing this situation: http://www.whitecase.com/files/Publication/a0f7221a-dd2d-4bdd-b5ef-6b9c360c43be/Presentation/PublicationAttachment/0050aa39-081f-4265-91c3-72c3e8a50cb4/article-Long-Arm-ERISA-M-Hamilton.pdf (http://www.whitecase.com/files/Publication/a0f7221a-dd2d-4bdd-b5ef-6b9c360c43be/Presentation/PublicationAttachment/0050aa39-081f-4265-91c3-72c3e8a50cb4/article-Long-Arm-ERISA-M-Hamilton.pdf).

Here is one from Sidley describing the "piercing the veil" issue with respect to private equity funds and their portfolio companies: http://www.sidley.com/tax-update-09-11-2013/ (http://www.sidley.com/tax-update-09-11-2013/). Sidley's note states that "[w]here a single private equity fund acquires a portfolio company ... it is very likely that the fund will be part of the ERISA controlled group of that portfolio company. By implication, all of the other current and future portfolio companies of that fund would also be part of the controlled group (assuming that the fund owns at least 80% of the equity of each of these portfolio companies)."


Title: Re: FIATY - Fiat S.p.A.
Post by: Grenville on February 05, 2014, 09:07:41 PM
I believe the Fortune article is correct. A non-U.S. parent company would be liable for pension termination and withdrawal liabilities of U.S. subsidiaries in its controlled group. The "controlled group" test under ERISA is generally 80% ownership. Here is a White & Case note discussing this situation: http://www.whitecase.com/files/Publication/a0f7221a-dd2d-4bdd-b5ef-6b9c360c43be/Presentation/PublicationAttachment/0050aa39-081f-4265-91c3-72c3e8a50cb4/article-Long-Arm-ERISA-M-Hamilton.pdf (http://www.whitecase.com/files/Publication/a0f7221a-dd2d-4bdd-b5ef-6b9c360c43be/Presentation/PublicationAttachment/0050aa39-081f-4265-91c3-72c3e8a50cb4/article-Long-Arm-ERISA-M-Hamilton.pdf).

Here is one from Sidley describing the "piercing the veil" issue with respect to private equity funds and their portfolio companies: http://www.sidley.com/tax-update-09-11-2013/ (http://www.sidley.com/tax-update-09-11-2013/). Sidley's note states that "[w]here a single private equity fund acquires a portfolio company ... it is very likely that the fund will be part of the ERISA controlled group of that portfolio company. By implication, all of the other current and future portfolio companies of that fund would also be part of the controlled group (assuming that the fund owns at least 80% of the equity of each of these portfolio companies)."

Interesting. What would happen if they spun off Ferrari? It seems easier for them to keep liability to the controlled group's existing assets. Dividends and other distributions would be hard to claw back unless they were only done to avoid the pension liability. 
Title: Re: FIATY - Fiat S.p.A.
Post by: skanjete on February 06, 2014, 12:17:31 AM
The new Fiat Chrysler faces a rougher road than most think


http://finance.fortune.cnn.com/2014/02/05/fiat-chrysler-pensions/?iid=SF_F_River (http://finance.fortune.cnn.com/2014/02/05/fiat-chrysler-pensions/?iid=SF_F_River)

I find it striking how the international press keeps on being negative about Fiat-Chrysler.
This article is a good example. The merger/take-over is without a doubt a positive thing for Fiat. Still, they try to give it a negative twist. No wonder the share is cheap.

Fundamentally : I suppose Marchionne and Elkann were aware of the pension liability when they tried to take over Chrysler. A takeover implies that you take over all assets and all liabilities, isn't it? Besides, the article turns things upside down. For, at the moment, it's Fiat that's needing Chrysler to survive, not the other way around.

It's exactly these kind of articles that make me so positive about the stock. The first time I gave an order to my broker to buy Fiat stock, he started laughing and since then he regularly bombards me with negative press articles and negative analyses about the company. I need only respond with the share performance ;).
Title: Re: FIATY - Fiat S.p.A.
Post by: ZenaidaMacroura on February 06, 2014, 03:58:18 AM
The new Fiat Chrysler faces a rougher road than most think


http://finance.fortune.cnn.com/2014/02/05/fiat-chrysler-pensions/?iid=SF_F_River (http://finance.fortune.cnn.com/2014/02/05/fiat-chrysler-pensions/?iid=SF_F_River)

I find it striking how the international press keeps on being negative about Fiat-Chrysler.
This article is a good example. The merger/take-over is without a doubt a positive thing for Fiat. Still, they try to give it a negative twist. No wonder the share is cheap.

Fundamentally : I suppose Marchionne and Elkann were aware of the pension liability when they tried to take over Chrysler. A takeover implies that you take over all assets and all liabilities, isn't it? Besides, the article turns things upside down. For, at the moment, it's Fiat that's needing Chrysler to survive, not the other way around.


That's what I tried to emphasize in my (badly done?) lampoon.  I would have thought it was not a surprise regarding the pension liability.  Clearly if they wanted to they could have spun off ferrari ex ante.  That wasn't part of the plan because they fully anticipate being able to service the shortfall.  Not to mention it was already reflected on the balance sheet before acquiring the remainder of the Chrystler stake.  The Pension is conceptually the same as  debt - I would think anyone in the position of acquiring a company would be familiar with the concept of EV...
Title: Re: FIATY - Fiat S.p.A.
Post by: Olmsted on February 06, 2014, 06:46:51 AM
The new Fiat Chrysler faces a rougher road than most think


http://finance.fortune.cnn.com/2014/02/05/fiat-chrysler-pensions/?iid=SF_F_River (http://finance.fortune.cnn.com/2014/02/05/fiat-chrysler-pensions/?iid=SF_F_River)
Seems like the writer just really wanted to hammer through his point - the person he contacted seemed to be implying that the pension obligation was already in the equation even when they only owned a majority interest in Chrystler.  It really makes no difference unless they had originally planned to renege in some fashion.

Fortune writer: You realize acquiring the remaining stake makes Fiat liable for Chrystler's Pension shortfall?

Fiat response:  Those obligations have been on Fiat's balance sheet since 2011.  This is not a new concern.

Fortune writer: This is a huge deal!  Whereas previously you were only likely liable, now you're definitely liable.  You guy's are such cowboys.

Article seems factually correct on most points, but the synthesis of those points is dumb.
Title: Re: FIATY - Fiat S.p.A.
Post by: paologorgo on February 07, 2014, 04:20:15 AM
TURIN (Reuters) – Italy’s luxury carmaker Ferrari does not plan to move to the Netherlands, the company said on Friday, denying media reports in Italian dailies.

“Ferrari has been based in Maranello since 1947 and will remain there with its cars and its brand,” the company said in a statement.

Ferrari’s parent company Fiat <FIA.MI> said last month it would register the holding of its newly created Fiat Chrysler Automobiles group in the Netherlands and set its tax domicile in Britain. <ID:I6N0KJ04D>

Italian daily Il Giornale reported on Friday the luxury carmaker would move its newly created merchandising company to the Netherlands or the UK.

http://www.euronews.com/business-newswires/2336574-italy-ferrari-says-will-not-move-brand-to-the-netherlands/ (http://www.euronews.com/business-newswires/2336574-italy-ferrari-says-will-not-move-brand-to-the-netherlands/)
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on February 07, 2014, 11:08:39 AM
Fiat's Move Risks Sticker Shock

Quote
A possible new first for Italian engineering: making shares of Fiat suddenly look more expensive.
 
Under Chief Executive Sergio Marchionne's new plan, Fiat and its Chrysler Group subsidiary will combine into a Netherlands-based holding company, with a U.K. tax domicile and a New York stock listing. Each leg of the structure will confer a benefit for the new Fiat Chrysler Automobiles. The Netherlands has more relaxed board requirements than many other countries. The U.K. offers lower tax rates. And the U.S. has deep capital markets with low borrowing costs.
 
But along with moving its primary listing to the U.S., Fiat Chrysler might also move its financial reporting to U.S. generally accepted accounting principles, known as GAAP.
 
This isn't required; the company could also remain on international financial reporting standards, or IFRS. But if the goal is better access to U.S. stock and bond investors, a switch may make sense. On a recent conference call, Mr. Marchionne said the company will "provide U.S. GAAP reconciliation, even if we stick to IFRS as the primary reporting standard."
 
Unlike international standards, under U.S. accounting companies aren't allowed to capitalize research and development spending. The latter lets a company move some research and development spending from the profit-and-loss statement to the balance sheet. ISI Group analysts reckon that in 2013 R&D capitalization boosted combined earnings before interest and taxes at Fiat and Chrysler by about 60%.
 
Fundamentally, switching to U.S. accounting would change nothing for Fiat Chrysler. Its cash flow would be the same regardless of which convention it adopts. But its valuation might look less flattering to a stock market that doesn't always stick religiously to the fundamentals.
 
Fiat's stock trades at about 9.8 times last year's earnings, in the same neighborhood as Ford Motor's  price/earnings ratio of 9.3 times and Volkswagen's  9.1 times. But ISI estimates that under U.S. accounting, the company would have actually lost about $50 million in 2013, rather than posting net income of about $1.2 billion at current exchange rates.
 
Switching accounting might make sense with the stock adopting New York as its home. But it would also offer investors a peek under Fiat Chrysler's hood that makes the price on the windshield look like less of a deal.


http://online.wsj.com/news/articles/SB10001424052702304450904579368814230831056?mod=Markets_newsreel_2 (http://online.wsj.com/news/articles/SB10001424052702304450904579368814230831056?mod=Markets_newsreel_2)
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on February 07, 2014, 11:20:23 AM
Fiat's Move Risks Sticker Shock

Quote
A possible new first for Italian engineering: making shares of Fiat suddenly look more expensive.
 
Under Chief Executive Sergio Marchionne's new plan, Fiat and its Chrysler Group subsidiary will combine into a Netherlands-based holding company, with a U.K. tax domicile and a New York stock listing. Each leg of the structure will confer a benefit for the new Fiat Chrysler Automobiles. The Netherlands has more relaxed board requirements than many other countries. The U.K. offers lower tax rates. And the U.S. has deep capital markets with low borrowing costs.
 
But along with moving its primary listing to the U.S., Fiat Chrysler might also move its financial reporting to U.S. generally accepted accounting principles, known as GAAP.
 
This isn't required; the company could also remain on international financial reporting standards, or IFRS. But if the goal is better access to U.S. stock and bond investors, a switch may make sense. On a recent conference call, Mr. Marchionne said the company will "provide U.S. GAAP reconciliation, even if we stick to IFRS as the primary reporting standard."
 
Unlike international standards, under U.S. accounting companies aren't allowed to capitalize research and development spending. The latter lets a company move some research and development spending from the profit-and-loss statement to the balance sheet. ISI Group analysts reckon that in 2013 R&D capitalization boosted combined earnings before interest and taxes at Fiat and Chrysler by about 60%.
 
Fundamentally, switching to U.S. accounting would change nothing for Fiat Chrysler. Its cash flow would be the same regardless of which convention it adopts. But its valuation might look less flattering to a stock market that doesn't always stick religiously to the fundamentals.
 
Fiat's stock trades at about 9.8 times last year's earnings, in the same neighborhood as Ford Motor's  price/earnings ratio of 9.3 times and Volkswagen's  9.1 times. But ISI estimates that under U.S. accounting, the company would have actually lost about $50 million in 2013, rather than posting net income of about $1.2 billion at current exchange rates.
 
Switching accounting might make sense with the stock adopting New York as its home. But it would also offer investors a peek under Fiat Chrysler's hood that makes the price on the windshield look like less of a deal.


http://online.wsj.com/news/articles/SB10001424052702304450904579368814230831056?mod=Markets_newsreel_2 (http://online.wsj.com/news/articles/SB10001424052702304450904579368814230831056?mod=Markets_newsreel_2)

in the last few months i dont saw 1, exactly one positive article from wsj about fiat. only negative. they bashing so hard  >:(
Title: Re: FIATY - Fiat S.p.A.
Post by: muscleman on February 08, 2014, 08:26:01 AM
Fiat's Move Risks Sticker Shock

Quote
A possible new first for Italian engineering: making shares of Fiat suddenly look more expensive.
 
Under Chief Executive Sergio Marchionne's new plan, Fiat and its Chrysler Group subsidiary will combine into a Netherlands-based holding company, with a U.K. tax domicile and a New York stock listing. Each leg of the structure will confer a benefit for the new Fiat Chrysler Automobiles. The Netherlands has more relaxed board requirements than many other countries. The U.K. offers lower tax rates. And the U.S. has deep capital markets with low borrowing costs.
 
But along with moving its primary listing to the U.S., Fiat Chrysler might also move its financial reporting to U.S. generally accepted accounting principles, known as GAAP.
 
This isn't required; the company could also remain on international financial reporting standards, or IFRS. But if the goal is better access to U.S. stock and bond investors, a switch may make sense. On a recent conference call, Mr. Marchionne said the company will "provide U.S. GAAP reconciliation, even if we stick to IFRS as the primary reporting standard."
 
Unlike international standards, under U.S. accounting companies aren't allowed to capitalize research and development spending. The latter lets a company move some research and development spending from the profit-and-loss statement to the balance sheet. ISI Group analysts reckon that in 2013 R&D capitalization boosted combined earnings before interest and taxes at Fiat and Chrysler by about 60%.
 
Fundamentally, switching to U.S. accounting would change nothing for Fiat Chrysler. Its cash flow would be the same regardless of which convention it adopts. But its valuation might look less flattering to a stock market that doesn't always stick religiously to the fundamentals.
 
Fiat's stock trades at about 9.8 times last year's earnings, in the same neighborhood as Ford Motor's  price/earnings ratio of 9.3 times and Volkswagen's  9.1 times. But ISI estimates that under U.S. accounting, the company would have actually lost about $50 million in 2013, rather than posting net income of about $1.2 billion at current exchange rates.
 
Switching accounting might make sense with the stock adopting New York as its home. But it would also offer investors a peek under Fiat Chrysler's hood that makes the price on the windshield look like less of a deal.


http://online.wsj.com/news/articles/SB10001424052702304450904579368814230831056?mod=Markets_newsreel_2 (http://online.wsj.com/news/articles/SB10001424052702304450904579368814230831056?mod=Markets_newsreel_2)

in the last few months i dont saw 1, exactly one positive article from wsj about fiat. only negative. they bashing so hard  >:(

Yep. I really wonder if WSJ and other news sites have collaboration with some big HFs such just Steven Cohen's. Maybe those HFs got stuck into a short position, and currently losing huge, so they hoped to get bailed out by WSJ's bashing articles?
Title: Re: FIATY - Fiat S.p.A.
Post by: brker_guy on February 08, 2014, 06:42:15 PM
Here is one positive piece.  In case you hardcore FIATY shareholders decide to spend frivolously one day with your new found FIATY wealth, you can buy yourself a Maserati or some of these clothes for your wardrobe.  :D :D :D

http://store.zegna.com/us/men/maserati-capsule-collection_gid26944?tp=59202&utm_campaign=us_ca&utm_medium=email&utm_source=20140130_maserati

Title: Re: FIATY - Fiat S.p.A.
Post by: vpagano on February 09, 2014, 07:51:47 PM
Just got back from the Philly Auto Show today and Fiat had a nice showing. Just a few random thoughts before bed:

Chrysler: Chrysler 200 was featured as expected
Dodge: Not much going on, also as expected. New trims on existing models and the new Durango
Jeep: Extremely popular ride along (copied by Toyota Highlander one nearby), new Cherokee probably the most featured
Ram: Award-winning trucks showcased and popular, pretty good foot traffic, first time I heard Dad say he'd want one over Ford or GM
Fiat: All flavors and variants of 500's to look at
Ferrari: The usual, always popular.
Maserati: Noticeably more present this year, first I saw the Ghibli in person. Didn't have a chance to sit in it, but many around me were surprised at its price point and expected it to be much higher.

Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on February 10, 2014, 10:33:07 AM
Chrysler Pays UAW Trust $5 Billion to End Bankruptcy Chapter


http://www.bloomberg.com/news/2014-02-10/chrysler-pays-uaw-trust-5-billion-to-close-bankruptcy-chapter.html (http://www.bloomberg.com/news/2014-02-10/chrysler-pays-uaw-trust-5-billion-to-close-bankruptcy-chapter.html)
Title: Re: FIATY - Fiat S.p.A.
Post by: Grenville on February 10, 2014, 06:38:22 PM
Nice review of the Cherokee in the WSJ.

All's Well With the Jeep Cherokee's Trailhawk but the Beak
http://online.wsj.com/news/articles/SB10001424052702304680904579366752795455262?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702304680904579366752795455262.html (http://online.wsj.com/news/articles/SB10001424052702304680904579366752795455262?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702304680904579366752795455262.html)

Quote
It might not be the prettiest thing, but how does the new Cherokee drive? Like a champ.
Title: Re: FIATY - Fiat S.p.A.
Post by: merkhet on February 10, 2014, 06:39:34 PM
I disagree -- I actually like the look of the Jeep Cherokee...
Title: Re: FIATY - Fiat S.p.A.
Post by: yader on February 11, 2014, 07:40:42 AM
FWIW I've been seeing a lot of the Fiat 500 driving around.  Seem to hit the middle aged woman demographic.  Women spend money.  They were on the floor of a GGP mall as well.  Never saw them left alone.  Middle eastern family folks seemed to be liking them as well.
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on February 11, 2014, 09:15:12 AM
FWIW I've been seeing a lot of the Fiat 500 driving around.  Seem to hit the middle aged woman demographic.  Women spend money.  They were on the floor of a GGP mall as well.  Never saw them left alone.  Middle eastern family folks seemed to be liking them as well.

I see plenty of Fiat 500s in the SF Bay Area as well. Probably 90% of drivers are ladies.
Title: Re: FIATY - Fiat S.p.A.
Post by: yadayada on February 11, 2014, 11:39:28 AM
Stating the obvious I know, but Marchionne is just phenomenal. I loved this quote on page 31 of the transcript:

Quote
I think the next step in fixing Europe is utilization of the industrial network to produce something other than mass market bound cars. We’ve been clear on this issue, we do not see a future for the continuation of this industrial framework to try and satisfy demand in a market which is over-serviced. And so we’re slowly moving our production assets towards that end. You’ve seen from the margins that we’ve been able to extract out of Maserati as to what is potentially doable if these assets are utilized for the right brand for global distribution. I think you need to give us time to continue to develop the rest of our network on that basis. I think at completion of the plan, we will be more than in positive territory. But it’s not going to come from the traditional application of the traditional brands in the European market. It just won’t happen. And I continue to be incredibly negative about the possibility of this market effectively coming back in and producing margins that allow anyone to recover the capital costs associated with the investments. So we had to get out of the sandbox. We’ve had this discussion before. And I’m as convinced now as I’ve ever been about the fact that our strategic direction is correct. But it’s not going to happen out of selling mass market cars, I can tell you, it won’t happen. There’s not enough margin left in the business to try and get that done.


Huge margin potential out of Chrysler too. 2013 MOP was 4.44% of revenue. After net interest expense of 994 and a 40% tax rate, net income is 1,223, or 1.08 per Fiat share. At 8.33X, Chrysler is worth $9 per Fiat share.

GM's North American goal is 10% EBIT margin....at a 7% MOP margin, Chrysler's EPS rises to 1.98, and is worth $16.53 at the same multiple, or $19.85 at 10X.

Sooo much potential here.

I dont really get it. Ferrari and maserati are included in there? I dont see them in the chrysler presentation. It says  it generated 2.1 billion $US in FCF in 2013. and like 2.5 bn$ projected net income expected in 2014. Which brands are that? Does that include Alfa romeo, ferrari and maserati? It does say fiat, does that include those other italian brands as well? I guess with possibly 2.5 bn$ in net income, it should deserve a 20bn$ market cap at the very least.

Anyway it looks cheap.
Title: Re: FIATY - Fiat S.p.A.
Post by: gr33ngi4nt on February 14, 2014, 06:38:34 AM
Hi all, thanks for all the insight you guys have given. Wish I had looked at this name much earlier.

On an EV/EBITDA basis this company is very cheap. However, considering the sizeable difference in CAPEX vs. depreciation (9% vs. 5.5% of revenue, respectively), I'm wondering how you guys are thinking about the substantial cash burn due to sizeable debt load and capex? Any insight into how long capex will remain elevated? Seems like any margin/growth improvements have a minimal affect on (negative) FCF vs. a more normalized capex spend.

I can see the multi-bagger scenario assuming the company can get through its significant capex investment phase. With normalized assumptions and higher margins at Maserati, $25 is reasonable.
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on February 15, 2014, 06:01:50 PM
http://online.wsj.com/news/articles/SB10001424052702304703804579379182975890604?mod=WSJ_auto_IndustryCollection (http://online.wsj.com/news/articles/SB10001424052702304703804579379182975890604?mod=WSJ_auto_IndustryCollection)


Fiat Chrysler Presses Canada on Factory


Auto Maker Wants Help on Investments in Windsor and Brampton Production
Title: Re: FIATY - Fiat S.p.A.
Post by: brker_guy on February 16, 2014, 11:04:00 PM

http://www.autonews.com/article/20140215/RETAIL01/302179962/jeep-weathers-the-storm-from-nature-and-critics?cciid=email-autonews-&r=2994C8377578D8V

Title: Re: FIATY - Fiat S.p.A.
Post by: sampr01 on February 17, 2014, 12:08:27 PM
http://finance.yahoo.com/news/fiats-access-chrysler-funds-curbed-104247577.html

Title: Re: FIATY - Fiat S.p.A.
Post by: MYDemaray on February 18, 2014, 07:20:00 AM
Fiat seeks to turn financing unit into a bank:
http://finance.yahoo.com/news/fiat-seeks-turn-financing-unit-104936110.html
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on February 18, 2014, 09:27:31 AM
European Auto Sales Rise for a Fifth Straight Month


http://www.nytimes.com/2014/02/19/business/international/european-auto-sales-rise-for-a-fifth-straight-month.html?ref=international&_r=0 (http://www.nytimes.com/2014/02/19/business/international/european-auto-sales-rise-for-a-fifth-straight-month.html?ref=international&_r=0)
Title: Re: FIATY - Fiat S.p.A.
Post by: brker_guy on February 18, 2014, 01:44:23 PM
Ferrari profits hit new record, despite fewer sales

http://www.bbc.co.uk/news/business-26243133

One more piece of news to share:

Dealers order more than 8,000 diesel-powered Ram 1500s in 3 days
March total equals almost half of normal output


http://www.autonews.com/article/20140218/RETAIL01/140219854/dealers-order-over-8000-diesel-powered-ram-1500s-in-3-days

Title: Re: FIATY - Fiat S.p.A.
Post by: Grenville on February 19, 2014, 02:04:43 PM
Nice remarks from Sergio at Canadian Auto Show. Highly recommend. 

http://www.autos.ca/general-news/video-watch-sergio-marchionne-deliver-keynote-address-cias/?utm_content=buffer4a0a3&utm_medium=social&utm_source=linkedin.com&utm_campaign=buffer (http://www.autos.ca/general-news/video-watch-sergio-marchionne-deliver-keynote-address-cias/?utm_content=buffer4a0a3&utm_medium=social&utm_source=linkedin.com&utm_campaign=buffer)
Title: Re: FIATY - Fiat S.p.A.
Post by: Grenville on February 19, 2014, 02:06:01 PM
Special to the Globe & Mail from Sergio:

"Why I’m asking Canadian taxpayers for money to invest" by Sergio Marchionne
http://www.theglobeandmail.com/report-on-business/why-im-asking-canadian-taxpayers-for-money-to-invest/article16949395/ (http://www.theglobeandmail.com/report-on-business/why-im-asking-canadian-taxpayers-for-money-to-invest/article16949395/)
Title: Re: FIATY - Fiat S.p.A.
Post by: HumbleInvestor on February 24, 2014, 08:24:50 AM
Hello,

What do you think will happen to the FIAT call options being traded on the Borsa Italiana (BIT) once the reverse merger takes place?
Of course I am referring to the long term call options (Expiring 2015-6).

Thanks ahead!
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on February 27, 2014, 07:50:06 AM
Fiat Said to Weigh $2 Billion Mandatory Convertible Bond

http://www.bloomberg.com/news/2014-02-27/fiat-said-to-weigh-2-billion-mandatory-convertible-bond.html (http://www.bloomberg.com/news/2014-02-27/fiat-said-to-weigh-2-billion-mandatory-convertible-bond.html)
Title: Re: FIATY - Fiat S.p.A.
Post by: MYDemaray on March 03, 2014, 04:13:30 AM
Fiat's UK style revival plan faces Italian hurdles:
http://finance.yahoo.com/news/fiats-uk-style-revival-plan-090000598.html (http://finance.yahoo.com/news/fiats-uk-style-revival-plan-090000598.html)
Title: Re: FIATY - Fiat S.p.A.
Post by: karthikpm on March 03, 2014, 06:39:00 AM
Chrysler's US sales  up 11%

http://news.morningstar.com/all/market-watch/TDJNMW20140303133/chrysler-feb-auto-sales-up-11-from-year-ago.aspx
Title: Re: FIATY - Fiat S.p.A.
Post by: Avyalake on March 03, 2014, 02:56:29 PM
Maserati   837   159   426%
Maserati striking real hard. http://www.goodcarbadcar.net/2012/10/maserati-brand-sales-figures-usa-canada.html
Title: Re: FIATY - Fiat S.p.A.
Post by: sleepydragon on March 03, 2014, 03:50:05 PM
my friend in China who's an actress recently posted in her blog a picture in front of a Maserati dealership. Maybe they are selling well in China too!
I think tesla is also getting a lot of attentions there, but I heard people had to wait till end of the year. People can get tesla cheaper than a BMW 3 series in China, so it's not a status symbol.
Title: Re: FIATY - Fiat S.p.A.
Post by: txlaw on March 03, 2014, 04:38:22 PM
my friend in China who's an actress recently posted in her blog a picture in front of a Maserati dealership. Maybe they are selling well in China too!
I think tesla is also getting a lot of attentions there, but I heard people had to wait till end of the year. People can get tesla cheaper than a BMW 3 series in China, so it's not a status symbol.

On that note, here's a story from Automotive News that I read a couple of months ago.

http://europe.autonews.com/article/20131118/ANE/131119927/maserati-quattroporte-sales-boosted-by-young-female-executives-in

"Forty percent of our clients in China are very successful young businesswoman who love European craftsmanship and want to be chauffeured in their new Quattroportes," Maserati CEO Harald Wester told Automotive News Europe.

Maybe Maseratis are the auto equivalents of ultra-luxury designer handbags to Chinese women?  They are pretty stylish.
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on March 04, 2014, 12:42:23 AM
http://www.autocar.co.uk/car-news/geneva-motor-show/maserati-alfieri-sports-car-concept-revealed
Title: Re: FIATY - Fiat S.p.A.
Post by: nikhil25 on March 04, 2014, 06:46:15 AM
http://www.autocar.co.uk/car-news/geneva-motor-show/maserati-alfieri-sports-car-concept-revealed

That is one good looking car!
Title: Re: FIATY - Fiat S.p.A.
Post by: nikhil25 on March 04, 2014, 06:49:26 AM
Launch of the Jeep Renegade - subcompact SUV
http://www.foxnews.com/leisure/2014/03/04/jeep-renegade-hits-subcompact-trail/

http://online.wsj.com/news/articles/SB10001424052702304585004579417182025150734?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702304585004579417182025150734.html
Title: Re: FIATY - Fiat S.p.A.
Post by: eburnside on March 04, 2014, 12:07:59 PM
Alfa Romeo 4C Spider featured on Hypebeast -

http://hypebeast.com/2014/3/2015-alfa-romeo-4c-spider
Title: Re: FIATY - Fiat S.p.A.
Post by: yadayada on March 04, 2014, 12:53:53 PM
http://www.autocar.co.uk/car-news/geneva-motor-show/maserati-alfieri-sports-car-concept-revealed

That is one good looking car!
why do they never release these amazing concept cars? The one that is released will probably not look as good.
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on March 04, 2014, 01:53:15 PM
Fiat Chrysler Boss Says No Plan To Sell Assets

Company to Announce Decision on Production of Minivan at Canadian Plant


http://online.wsj.com/news/articles/SB10001424052702304815004579418760678583166?mod=WSJ_business_MoreArticles&mg=reno64-wsj (http://online.wsj.com/news/articles/SB10001424052702304815004579418760678583166?mod=WSJ_business_MoreArticles&mg=reno64-wsj)
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on March 05, 2014, 07:45:51 AM
Apparently the market likes the Alfieri as much as we do!

I bought my first Fiat position  around one year ago, very interesting to see a business evolve :) (and my shares ofc, who are we kidding !?)
Title: Re: FIATY - Fiat S.p.A.
Post by: dutchman on March 05, 2014, 07:53:48 AM
I  think the new renegade is the bigger news here....should be a hot seller.
Title: Re: FIATY - Fiat S.p.A.
Post by: Palantir on March 07, 2014, 05:47:39 PM
Finally bought this, well after most of you smart people. It still looks cheap, and I like owning Ferrari.  :D
Title: Re: FIATY - Fiat S.p.A.
Post by: plato1976 on March 07, 2014, 06:00:04 PM
Not sure if we will crash together after your purchase...
but I won't sell until at least 20

Finally bought this, well after most of you smart people. It still looks cheap, and I like owning Ferrari. :D
Title: Re: FIATY - Fiat S.p.A.
Post by: karthikpm on March 07, 2014, 10:17:47 PM
Fiat mentioned in the Fairfax Annual Letter

 Tesla Motors, for example, sold 22,477 cars in 2013 but commands a market cap of
$31 billion, while Fiat, which we like, sold 4.4 million cars but has a market cap of only $14 billion.

And looks like they exited their Fiat position

"$69 million from the sale of Fiat"

Any guesses/ideas as to what price they bought Fiat at ?
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on March 10, 2014, 07:11:57 AM
Finally bought this, well after most of you smart people. It still looks cheap, and I like owning Ferrari.  :D

Meanwhile, in a Ferrari dealer shop:

Palantir: "You know, I am a Ferrari shareholder, what can you do for me??"

:D
Title: Re: FIATY - Fiat S.p.A.
Post by: Palantir on March 10, 2014, 08:10:27 AM
^Would be lying if I said that had not crossed my mind.  :P
Title: Re: FIATY - Fiat S.p.A.
Post by: karthikpm on March 10, 2014, 04:19:16 PM
More good press for FIAT on Geneva Auto Show- seems like the Maserati Alfieri was a hit !

http://www.economist.com/node/21598868
Title: Re: FIATY - Fiat S.p.A.
Post by: goldfinger on March 13, 2014, 12:39:53 PM
Good news on the earnings front. Full disclosure of the business model of the combined entity May 6:
http://www.bloomberg.com/news/2014-03-13/fiat-ceo-marchionne-says-quarterly-profit-to-rise-on-u-s-.html
Title: Re: FIATY - Fiat S.p.A.
Post by: yadayada on March 13, 2014, 02:45:16 PM
Fiat mentioned in the Fairfax Annual Letter

 Tesla Motors, for example, sold 22,477 cars in 2013 but commands a market cap of
$31 billion, while Fiat, which we like, sold 4.4 million cars but has a market cap of only $14 billion.

And looks like they exited their Fiat position

"$69 million from the sale of Fiat"

Any guesses/ideas as to what price they bought Fiat at ?
isn't this bad? I still only have a small position because i havent studied it, but i dont really like making it bigger if these guys are selling.. Im not smarter then them for sure
Title: Re: FIATY - Fiat S.p.A.
Post by: ourkid8 on March 13, 2014, 02:47:47 PM
I would not read too much into what Fairfax has been doing as they also sold out of Wells Fargo, US Bancorp and JNJ prematurely considering how highly Prem spoke about them in the past. 

Tks,
S

Fiat mentioned in the Fairfax Annual Letter

 Tesla Motors, for example, sold 22,477 cars in 2013 but commands a market cap of
$31 billion, while Fiat, which we like, sold 4.4 million cars but has a market cap of only $14 billion.

And looks like they exited their Fiat position

"$69 million from the sale of Fiat"

Any guesses/ideas as to what price they bought Fiat at ?
isn't this bad? I still only have a small position because i havent studied it, but i dont really like making it bigger if these guys are selling.. Im not smarter then them for sure
Title: Re: FIATY - Fiat S.p.A.
Post by: Palantir on March 13, 2014, 02:52:22 PM
^Why do you guys feel it is not cheap? Overall, all considered, it seems to have a fairly high normalized FCF yield, and serious upside from higher sales of high margin cars plus platform synchronization across Chrysler, Fiat, and Maserati...
Title: Re: FIATY - Fiat S.p.A.
Post by: Nnejad on March 13, 2014, 02:52:31 PM
Fiat mentioned in the Fairfax Annual Letter

 Tesla Motors, for example, sold 22,477 cars in 2013 but commands a market cap of
$31 billion, while Fiat, which we like, sold 4.4 million cars but has a market cap of only $14 billion.

And looks like they exited their Fiat position

"$69 million from the sale of Fiat"

Any guesses/ideas as to what price they bought Fiat at ?

I believe they bought at ~US$4.75 per share.
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on March 13, 2014, 11:53:57 PM
^Why do you guys feel it is not cheap? Overall, all considered, it seems to have a fairly high normalized FCF yield, and serious upside from higher sales of high margin cars plus platform synchronization across Chrysler, Fiat, and Maserati...

+1
Title: Re: FIATY - Fiat S.p.A.
Post by: nikhil25 on March 17, 2014, 02:17:53 PM
Fiat Chrysler Recalls 18K New 500L Cars Due To Transmission Issue
http://detroit.cbslocal.com/2014/03/15/fiat-chrysler-recalls-18k-new-500l-cars-due-to-transmission-issue/

Fiat Chrysler CEO Sets Internal Deadline of Oct. 1 for NY Listing
Listing Would Further Solidify Tie-Up, Give Greater Access to U.S. Capital Market
http://online.wsj.com/news/articles/SB10001424052702303546204579439631725485534?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702303546204579439631725485534.html
Title: Re: FIATY - Fiat S.p.A.
Post by: Grenville on March 18, 2014, 05:31:11 PM
Fiat announces pricing of 1bln in notes due 2021 at 4.75%

Quote
Fiat S.p.A. announces pricing of its offering of € 1 billion in guaranteed 4.75% Senior Notes due March 2021
Following Fiat S.p.A.’s announcement earlier today of its launch of a benchmark note issuance denominated in Euro, Fiat S.p.A. confirms that the offering will be of € 1 billion in principal amount of 4.75% Senior Notes due March 2021, with an issue price of 100% of the principal amount.
The closing of the offering is currently expected on 21st March 2014. The notes will be issued by Fiat Finance and Trade Ltd, société anonyme, a wholly-owned subsidiary of Fiat S.p.A., under the Global Medium Term Note Programme guaranteed by Fiat S.p.A.. The offering was very well received and orders were significantly higher than the amount of the offering.

Hopefully this lowers the probability of a convertible debt offering!
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on March 20, 2014, 10:56:17 PM
Ram Pickup Makes Its Move Against GM, Ford


Chrysler Has Improved the Truck's Look, Performance and Pricing



http://online.wsj.com/news/articles/SB10001424052702304732804579425213715193726?mod=WSJ_hps_sections_business&mg=reno64-wsj (http://online.wsj.com/news/articles/SB10001424052702304732804579425213715193726?mod=WSJ_hps_sections_business&mg=reno64-wsj)
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on March 23, 2014, 12:09:28 AM
Fiat 500L: The Rich Inner Life of a Gutless Clown Car


The Fiat 500L's best qualities—a hip, high-stye interior with lots of flexible space and utility—are aimed at consumers who are driving-agnostic




http://online.wsj.com/news/articles/SB10001424052702304756104579449580815842924?mod=WSJ_hp_EditorsPicks&mg=reno64-wsj (http://online.wsj.com/news/articles/SB10001424052702304756104579449580815842924?mod=WSJ_hp_EditorsPicks&mg=reno64-wsj)
Title: Re: FIATY - Fiat S.p.A.
Post by: nikhil25 on March 31, 2014, 11:52:19 AM
Fiat chief sets production aim of 6 mln cars a year by 2018
http://www.reuters.com/article/2014/03/31/fiat-agm-idUSL5N0MS2VF20140331

Quote
* Capacity increase depends on Alfa Romeo, Maserati revamp
* CEO says doesn't need to sell assets to fund business plan
* Says to make announcement on Jeeps in China "within days"
Title: Re: FIATY - Fiat S.p.A.
Post by: karthikpm on April 01, 2014, 07:28:50 AM
http://www.marketwatch.com/story/chrysler-march-sales-up-13-jeep-sales-surge-47-2014-04-01
Title: Re: FIATY - Fiat S.p.A.
Post by: brker_guy on April 01, 2014, 02:14:08 PM
I guess the critics might having the first laughs at this Baby Jeep, but FIAT/Chrysler is having the last laugh...

http://www.businessweek.com/articles/2014-04-01/fiats-baby-jeep-strategy-pays-off#r=lr-sr

Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on April 02, 2014, 07:58:05 AM
Chrysler Recalls 867,795 SUVs Worldwide for Brake System


http://www.bloomberg.com/news/2014-04-02/chrysler-recalls-867-795-suv-worldwide-for-brake-system.html (http://www.bloomberg.com/news/2014-04-02/chrysler-recalls-867-795-suv-worldwide-for-brake-system.html)
Title: Re: FIATY - Fiat S.p.A.
Post by: dutchman on April 09, 2014, 10:31:15 AM
Guys apparently ubs has something new out on fiat, along with a buy rating :)  anyone have any info?
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on April 11, 2014, 09:21:32 AM


Chrysler to Begin Building Parts to Fix Recalled Jeeps

Production on Replacement Parts to Start Next Month

http://online.wsj.com/news/articles/SB10001424052702303873604579495503278531842?mod=WSJ_LatestHeadlines&mg=reno64-wsj (http://online.wsj.com/news/articles/SB10001424052702303873604579495503278531842?mod=WSJ_LatestHeadlines&mg=reno64-wsj)


recall party! every company is joining in
Title: Re: FIATY - Fiat S.p.A.
Post by: karthikpm on April 11, 2014, 09:56:17 AM
Suspect it is an "under the radar " effort by all car companies to get these done when GM is in the spotlight
Title: Re: FIATY - Fiat S.p.A.
Post by: Sportgamma on April 14, 2014, 09:09:57 AM
Quote
Maserati has Italian allure and a recognized sporting heritage. But Fiat Chrysler, the world's seventh-largest auto group, sold just 15,400 of the growling, muscular sportscars last year - not yet enough to change the group's fortunes - compared to Porsche's sales of over 160,000.

Porsche's 18-percent automotive operating margin - the rate of underlying profit on its sales - has made it a more valuable company than rivals selling millions of cars each year. Even in the premium sector, the average margin is only 10 percent.

Porsche contributed less than 2 percent of VW group sales in 2013 but about 22 percent of its operating profit. Maserati's trading profit tripled last year but still contributed just 5 percent of Fiat profits and less than 2 percent of sales.

By 2015, Marchionne wants to be selling 50,000 Maseratis. The goal hinges on a rapid take-up of new models designed to appeal to a broader variety of driver tastes and budgets.

Maseratis are priced at around a 20 percent premium over similar-sized rival German cars, so the product offensive must not cheapen the brand.

http://finance.yahoo.com/news/porsches-success-looms-over-maserati-155924686.html
Title: Re: FIATY - Fiat S.p.A.
Post by: Palantir on April 14, 2014, 10:01:56 AM
To be fair, Porsche has steadily been moving downmarket over the past 20 years. Soon they are expected to release a sub $40k Macan.

I am curious though where Alfa Romeo will fit in, given that Maserati is projected to become the pre-eminent luxury brand in their stable.
Title: Re: FIATY - Fiat S.p.A.
Post by: vinod1 on April 15, 2014, 04:49:02 AM
I am curious though where Alfa Romeo will fit in, given that Maserati is projected to become the pre-eminent luxury brand in their stable.

I think Alfa Romeo would be sold, despite Marchionne's denials. There is too much overlap with Maserati and they are not exactly pouring money into this at the moment. Seems more like a holding pattern to get a good price from VW.

Vinod
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on April 15, 2014, 05:09:06 AM
I am curious though where Alfa Romeo will fit in, given that Maserati is projected to become the pre-eminent luxury brand in their stable.

I think Alfa Romeo would be sold, despite Marchionne's denials. There is too much overlap with Maserati and they are not exactly pouring money into this at the moment. Seems more like a holding pattern to get a good price from VW.

Vinod

i dont think they will sell alfa. they created the alfa 4c and in may fiat will reveal their next Business plan for the next years. so there we will see what happens with the Group and alfa
Title: Re: FIATY - Fiat S.p.A.
Post by: wbr on April 16, 2014, 03:58:28 AM
Maserati Profit Seen Offsetting Fiat Losses

http://www.bloomberg.com/news/2014-04-15/maserati-profit-seen-offsetting-fiat-s-european-losses.html?cmpid=yhoo (http://www.bloomberg.com/news/2014-04-15/maserati-profit-seen-offsetting-fiat-s-european-losses.html?cmpid=yhoo)
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on April 16, 2014, 04:41:29 AM
Maserati Profit Seen Offsetting Fiat Losses

http://www.bloomberg.com/news/2014-04-15/maserati-profit-seen-offsetting-fiat-s-european-losses.html?cmpid=yhoo (http://www.bloomberg.com/news/2014-04-15/maserati-profit-seen-offsetting-fiat-s-european-losses.html?cmpid=yhoo)

great! thanks  :)
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on April 16, 2014, 05:52:35 AM
http://www.bloomberg.com/video/maserati-getting-3-500-orders-per-month-ceo-says-27djV7V1Qyqedm_R7MINsA.html
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on April 16, 2014, 08:03:03 AM
http://www.bloomberg.com/video/maserati-getting-3-500-orders-per-month-ceo-says-27djV7V1Qyqedm_R7MINsA.html

Maserati Said to Weigh New Sports Car After Orders Triple



http://www.bloomberg.com/news/2014-04-15/maserati-profit-seen-offsetting-fiat-s-european-losses.html
Title: Re: FIATY - Fiat S.p.A.
Post by: Grenville on April 16, 2014, 08:32:02 AM
http://www.bloomberg.com/video/maserati-getting-3-500-orders-per-month-ceo-says-27djV7V1Qyqedm_R7MINsA.html

nice interview, nice color. I like his comment about how it's not about volume.
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on April 19, 2014, 11:21:12 AM
http://www.reuters.com/article/2014/04/19/us-fiat-spa-jeep-china-idUSBREA3I08720140419
Title: Re: FIATY - Fiat S.p.A.
Post by: Chalk bag on April 19, 2014, 11:48:03 AM
http://www.reuters.com/article/2014/04/19/us-fiat-spa-jeep-china-idUSBREA3I08720140419

Finally! Took them long enough...Dislike the fact that it doesn't start ramping until late 2015.
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on April 23, 2014, 10:34:39 AM
How the Dodge Charger Gets Cops to Fall in Love With a Car


http://www.businessweek.com/articles/2014-04-23/how-the-dodge-charger-gets-cops-to-fall-in-love-with-a-car#r=most popular (http://www.businessweek.com/articles/2014-04-23/how-the-dodge-charger-gets-cops-to-fall-in-love-with-a-car#r=most popular)
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on April 30, 2014, 04:11:59 PM

Chrysler Seen Extending 48-Month Sales Gain With New 200




http://www.bloomberg.com/news/2014-04-30/chrysler-seen-extending-48-month-sales-gain-with-new-200.html (http://www.bloomberg.com/news/2014-04-30/chrysler-seen-extending-48-month-sales-gain-with-new-200.html)
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on May 05, 2014, 08:15:15 AM
Alfa Romeo Looks for Love in the U.S.

Fiat Chrysler to Challenge Audi, BMW With Relaunched Car Line



http://online.wsj.com/news/articles/SB10001424052702303948104579533740506882568?mg=reno64-wsj (http://online.wsj.com/news/articles/SB10001424052702303948104579533740506882568?mg=reno64-wsj)
Title: Re: FIATY - Fiat S.p.A.
Post by: peter1234 on May 05, 2014, 10:23:57 AM
Here is the FT's (skeptical) take:

Fiat Chrysler plans Alfa Romeo drive

http://www.ft.com/intl/cms/s/0/53161660-d443-11e3-bf4e-00144feabdc0.html
Title: Re: FIATY - Fiat S.p.A.
Post by: fwallstreet on May 05, 2014, 02:32:44 PM
I'm at Ira Sohn and Fiat won the stock idea contest. Was a good presentation, no new info or analysis but a great overview of all the arguments discussed here in the past.
Title: Re: FIATY - Fiat S.p.A.
Post by: argonaut on May 05, 2014, 02:35:27 PM
Thanks! Is there a link to the Pptx we can look at? What fair value did they arrive at and over what timeframe?
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on May 05, 2014, 02:50:35 PM
Presented by Greenwood or someone else?

Never mind, should've just googled it.
Title: Re: FIATY - Fiat S.p.A.
Post by: karthikpm on May 05, 2014, 05:56:19 PM
One of the columbia students presented it .. usually these appear in the Graham and Doddsville newsletter released quarterly
Title: Re: FIATY - Fiat S.p.A.
Post by: PLynchJr on May 06, 2014, 07:05:14 AM
I can't find the presentation.  Could someone please post it here or link to it?  Thanks.
Title: Re: FIATY - Fiat S.p.A.
Post by: wbr on May 06, 2014, 08:04:44 AM
I've only found the key points of the thesis:

http://www.marketfolly.com/2014/05/sohn-investment-contest-winner-michael.html (http://www.marketfolly.com/2014/05/sohn-investment-contest-winner-michael.html)
Title: Re: FIATY - Fiat S.p.A.
Post by: Avyalake on May 06, 2014, 08:19:07 AM
Does anyone have link to the investor day live audio / video? Thanks
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on May 06, 2014, 08:21:25 AM
here is a link with pdf presentations from fiat.

http://www.fcagroup.com/investorday/Pages/Home.aspx
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on May 06, 2014, 09:18:16 AM
here is a link with pdf presentations from fiat.

http://www.fcagroup.com/investorday/Pages/Home.aspx

there you can watch all presentations. ferrari was for me great  ;D (their page about valuation).    8)


conclusion: maserati, Jeep, chrysler, ram, ferrari. what a Group of assets. still big undervalued.
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on May 06, 2014, 10:03:20 AM
Alfa presentation, wow.
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on May 06, 2014, 01:11:39 PM
http://www.fiatspa.com/en-US/media_center/FiatDocuments/2014/Maggio/FIAT_S_P_A_BOARD_OF_DIRECTORS_MEETING_2014_FIRST_QUARTER_RESULTS.pdf
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on May 06, 2014, 01:48:21 PM
http://www.fcagroup.com/investorday/PresentationList/Five-Year_Financial_Targets-RP_May_6.pdf

 financial Targets for 2018

global sales 2018: 7mio cars


Revenue 2018: 132b€

net Profit: 5b€ or 4€ per share


Title: Re: FIATY - Fiat S.p.A.
Post by: Chalk bag on May 06, 2014, 03:43:17 PM
Went through the slides and the presentation.
This is gambling! Not like they have any choices. What if another economic crisis hits in 2016-17? With the leverage they have the Co is going to be in deep doodoo. Frustrating.
Title: Re: FIATY - Fiat S.p.A.
Post by: txlaw on May 06, 2014, 04:30:51 PM
Talk about shooting for the moon.  4 EUR in profit per share and virtually no industrial net debt after 5 years.

I'm a bit nervous about this, but if Marchionne can deliver, his tenure will go down as one of the greatest ones ever in business (and investing).
Title: Re: FIATY - Fiat S.p.A.
Post by: ZenaidaMacroura on May 06, 2014, 05:06:35 PM
It's really ambitious...

I feel like if they run into another financial crisis they will have to think hard about spinning off some of their cherished brands (ferrari).

I was wondering why most board members were investing in fiat?  Is it the portfolio of brands?  Maserati, and ferrari are crown jewels, and chryster's refreshed lineup looks promising, or is the thesis the turnaround? 
Title: Re: FIATY - Fiat S.p.A.
Post by: Palantir on May 06, 2014, 05:38:29 PM
I am in because I find the FCF yield attractive, and ferrari/maserati has nice upside.
Title: Re: FIATY - Fiat S.p.A.
Post by: Chalk bag on May 06, 2014, 05:42:51 PM
I am in because I find the FCF yield attractive, and ferrari/maserati has nice upside.

Not sure if you are serious. There will be NO FCF until 2018! They said it -- going to plow everything into R&D + CapEx! This is binary as hell as a levered equity as is, and they are making it even more so. I have no question that if the world is fine in 2018 and they nail every execution step, the stock is gonna be @ 30+ Euro; but what if something goes wrong? Cash Flow dries up and they are already squeezing their working capital and the company can seriously go belly up.
Title: Re: FIATY - Fiat S.p.A.
Post by: karthikpm on May 06, 2014, 06:52:40 PM
Wow! Tall order and  seems very ambitious . I was hoping for less Capex, more integration - cost savings across brands translating to profitability. May have been fooling myself . Pretty certain they cannot deliver on all of these.. If they did, it would get the stock to 30 Euro - in the event of not meeting 10% CAGR in volumes in the next 4-5 years- wonder what the range of possible outcomes are . I can see atleast one bet they will face bankruptcy yet again..
Title: Re: FIATY - Fiat S.p.A.
Post by: Chalk bag on May 06, 2014, 07:19:02 PM
Wow! Tall order and  seems very ambitious . I was hoping for less Capex, more integration - cost savings across brands translating to profitability. May have been fooling myself . Pretty certain they cannot deliver on all of these.. If they did, it would get the stock to 30 Euro - in the event of not meeting 10% CAGR in volumes in the next 4-5 years- wonder what the range of possible outcomes are . I can see atleast one bet they will face bankruptcy yet again..

I think it is prudent to reduce exposure. Here is the reason:

While the catalyst component is unchanged, my original bull thesis is also predicated on:

-   CEO will talk merger synergies and margin expansion in a material way.
-   Capital spending intensity will decline after 2016 and Fiat will achieve meaningful FCF.
-   LatAm will not suffer materially negative EBIT margins despite weakness.

I was wrong. It turns out that the above were not realized. Marchionne talked about the cost savings but places not enough emphasis on it. He is also adamant about pushing the capital spending plan into 2017 to realize the game-plan for Alpha Romeo, thus terming out FCF. Finally, the 1Q LatAm print at weak trading profit margins (and negative EBIT margin) could spell much trouble to come before its Jeep plant opens up in 2015.

All in, the next 5-year plan paints a picture that terms out free-cash-flow and places much emphasis on execution. What this means is that the management team is exchanging bird on hand (FCF) to birds-in-the-woods (future FCF post-2017) in the ambition to be a sizable player. I cannot blame them (since it is pretty much the only way they can remain relevant), but I have misjudged how much capital is needed. This game plan makes the investment much more binary and SAAR-dependent than I had hoped, and while the print is by no-means horrendous, I believe the respective risk-tolerance should be toned down respectively.

I will personally still keep some -- I believe the October catalyst is still in-tact and sell-side may come out with bullish thesis given the management -5yr guidance (which is very, very blur-sky bullish and not unachievable if execution checks-out, but it’s 1 side of the count and should not be the cornerstone of an INVESTMENT thesis.).
Title: Re: FIATY - Fiat S.p.A.
Post by: Packer16 on May 06, 2014, 07:44:11 PM
Maybe I am missing something but why would you invest in Fiat, GM or any car company for that matter if you thought we were at the end of the SAAR cycle?  Isn't part of the thesis that we are in early/mid SAAR cycle and we have more replacement demand to boost sales?

Packer
Title: Re: FIATY - Fiat S.p.A.
Post by: krazeenyc on May 06, 2014, 07:59:48 PM
Wow! Tall order and  seems very ambitious . I was hoping for less Capex, more integration - cost savings across brands translating to profitability. May have been fooling myself . Pretty certain they cannot deliver on all of these.. If they did, it would get the stock to 30 Euro - in the event of not meeting 10% CAGR in volumes in the next 4-5 years- wonder what the range of possible outcomes are . I can see atleast one bet they will face bankruptcy yet again..

I think it is prudent to reduce exposure. Here is the reason:

While the catalyst component is unchanged, my original bull thesis is also predicated on:

-   CEO will talk merger synergies and margin expansion in a material way.
-   Capital spending intensity will decline after 2016 and Fiat will achieve meaningful FCF.
-   LatAm will not suffer materially negative EBIT margins despite weakness.

I was wrong. It turns out that the above were not realized. Marchionne talked about the cost savings but places not enough emphasis on it. He is also adamant about pushing the capital spending plan into 2017 to realize the game-plan for Alpha Romeo, thus terming out FCF. Finally, the 1Q LatAm print at weak trading profit margins (and negative EBIT margin) could spell much trouble to come before its Jeep plant opens up in 2015.

All in, the next 5-year plan paints a picture that terms out free-cash-flow and places much emphasis on execution. What this means is that the management team is exchanging bird on hand (FCF) to birds-in-the-woods (future FCF post-2017) in the ambition to be a sizable player. I cannot blame them (since it is pretty much the only way they can remain relevant), but I have misjudged how much capital is needed. This game plan makes the investment much more binary and SAAR-dependent than I had hoped, and while the print is by no-means horrendous, I believe the respective risk-tolerance should be toned down respectively.

I will personally still keep some -- I believe the October catalyst is still in-tact and sell-side may come out with bullish thesis given the management -5yr guidance (which is very, very blur-sky bullish and not unachievable if execution checks-out, but it’s 1 side of the count and should not be the cornerstone of an INVESTMENT thesis.).


Assuming that you have quality management in place, having ambitious goals does not mean that they won't pivot as circumstances change. Given Fiat's position in the market, investing to grow their luxury brands (this is going to be where the profit is going to be) makes a lot of sense to me.

I also don't think this is nearly as binary as you portray things. They may be able to revive Alfa Romeo, while Fiat might not do as well, or vice versa. I definitely don't think it's all or nothing here.

FWIW, I assume the 5 year plan is aspirational.
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on May 06, 2014, 08:07:36 PM
kepler cheuvreux


Reduce

Target price
EUR 6.40
Title: Re: FIATY - Fiat S.p.A.
Post by: MYDemaray on May 06, 2014, 08:09:24 PM
What if another economic crisis hits in 2016-17?

Marchionne addressed this during the call. His answer was that the plan only calls for two capacity expansions -- Brazil (I think) and China. He said they would simply ratchet back the capex and wait it out. He used Europe as an example and said that their willingness to stop spending during the crisis - though criticized - allowed them to keep from raising capital.

Not sure if you read "Once Upon A Car", but this interaction stood out to me.

Quote
All through lunch Marchionne questioned him: What was Chrysler's plan? Why had Cerberus bought the company? What did it need to succeed....
...Marchionne looked at him and got very serious. "Can you survive if sales in the U.S. go below ten million a year" he said bluntly.
LaSorda wasn't sure he heard right. Annual sales hadn't dropped below ten million in the American car market for twenty-five years. For the past five, it had been well above sixteen million. Marchionne was talking about a 40 percent drop -- not exactly possible.
"We're pretty sure we're going to be around fourteen, fifteen million,"LaSorda said. "And we'll be fine at that."...
"Tom, let me tell you something," he said. "I'm a lot more negative about future sales volumes than you are. In fact, the numbers you are talking about are outlandish. If you think your salvation is coming from the market numbers, you're wrong. You have to be able to bleed to death at ten million to make it."

Will those words come back to haunt Marchionne -- or are they an indication of his paranoia and survival instincts? In the end, you are betting on his judgment -- to pull back on capex and preserve the enterprise should it come to that.
Title: Re: FIATY - Fiat S.p.A.
Post by: Palantir on May 06, 2014, 08:12:06 PM
I am in because I find the FCF yield attractive, and ferrari/maserati has nice upside.

Not sure if you are serious. There will be NO FCF until 2018! They said it -- going to plow everything into R&D + CapEx! This is binary as hell as a levered equity as is, and they are making it even more so. I have no question that if the world is fine in 2018 and they nail every execution step, the stock is gonna be @ 30+ Euro; but what if something goes wrong? Cash Flow dries up and they are already squeezing their working capital and the company can seriously go belly up.

You are quite right, but I was thinking about the new plan as growth capX. It is also possible that you are more knowledgeable than me about this company, and your concerns are justified. :)
Title: Re: FIATY - Fiat S.p.A.
Post by: Spekulatius on May 06, 2014, 08:15:10 PM
Alfa presentation, wow.

The Alfa presentation seems like a joke to me. I agree with Chalk Bag that this LT plan does not look that great  - just too heavily backend loaded. Great if they can pull it off, but I think there is a 50% chance that this is going to be a zero.
Title: Re: FIATY - Fiat S.p.A.
Post by: sleepydragon on May 06, 2014, 10:14:06 PM
some of the most successful business men had big goals that most other people thought impossible. many real examples. steve jobs and iPod, Elon musk and his rockets, intel and moore's law, microsoft and personal computer.

Title: Re: FIATY - Fiat S.p.A.
Post by: karthikpm on May 06, 2014, 10:32:57 PM
some of the most successful business men had big goals that most other people thought impossible. many real examples. steve jobs and iPod, Elon musk and his rockets, intel and moore's law, microsoft and personal computer.



Each of these people had a new or different product, making cars /auto is a capital intensive low quality business and not quite the same

That said, I think getting to the IPO in october is a definite catalyst
Title: Re: FIATY - Fiat S.p.A.
Post by: jay21 on May 07, 2014, 05:25:06 AM
Are there any assumptions in particular that people feel are overly ambitious?

Sales volume going from 4.4 to 7.0 for an increase of 2.6.  Jeep will account for 1.2 of that increase.  Geographically, APAC accounts for .9.  Maybe Jeep is aggressive?

I think that the Euro market may have bottomed so I don't have a problem with their Fiat increase of .4. Chrysler will launch a few new models so it makes sense they gain some volume.

IDK, Jeep might be the only one that looks somewhat unrealistic, but China and foreign markets should provide solid growth.  What are people thinking is unrealistic?
Title: Re: FIATY - Fiat S.p.A.
Post by: wbr on May 07, 2014, 05:46:21 AM
Are there any assumptions in particular that people feel are overly ambitious?

Sales volume going from 4.4 to 7.0 for an increase of 2.6.  Jeep will account for 1.2 of that increase.  Geographically, APAC accounts for .9.  Maybe Jeep is aggressive?

I think that the Euro market may have bottomed so I don't have a problem with their Fiat increase of .4. Chrysler will launch a few new models so it makes sense they gain some volume.

IDK, Jeep might be the only one that looks somewhat unrealistic, but China and foreign markets should provide solid growth.  What are people thinking is unrealistic?

People think Alpha Romeo is unrealistic. Jeep is a very iconic brand that has already some traction, so the growth assumptions seem ok (same for Maserati imo). As you said for the Fiat brand growth assumptions might be on the low end (most of it in APAC, but almost nothing in Europe).
The problem with Alpha is the lack of brand equity and models, so a lot of marketing and R&D spending is needed and the timeframe seems a bit short.

And the most important question is how Fiat is going to pay for all of this.
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on May 07, 2014, 05:48:41 AM
I think the deleveraging is ambitious.
Title: Re: FIATY - Fiat S.p.A.
Post by: jay21 on May 07, 2014, 05:58:57 AM
Are there any assumptions in particular that people feel are overly ambitious?

Sales volume going from 4.4 to 7.0 for an increase of 2.6.  Jeep will account for 1.2 of that increase.  Geographically, APAC accounts for .9.  Maybe Jeep is aggressive?

I think that the Euro market may have bottomed so I don't have a problem with their Fiat increase of .4. Chrysler will launch a few new models so it makes sense they gain some volume.

IDK, Jeep might be the only one that looks somewhat unrealistic, but China and foreign markets should provide solid growth.  What are people thinking is unrealistic?

People think Alpha Romeo is unrealistic. Jeep is a very iconic brand that has already some traction, so the growth assumptions seem ok (same for Maserati imo). As you said for the Fiat brand growth assumptions might be on the low end (most of it in APAC, but almost nothing in Europe).
The problem with Alpha is the lack of brand equity and models, so a lot of marketing and R&D spending is needed and the timeframe seems a bit short.

And the most important question is how Fiat is going to pay for all of this.

They only expect to sell .4 of Romeo by 2018.  Given the investment, this seems unreasonable?  Also, it's probably immaterial to the 5 year plan (but maybe significant to a 20 year plan). 

In terms of pay - look at slide 16 (this also applies to the de-leveraging question).  They are generating ~35m in EBITDA with 7m in interest expense.  This leaves 28m a year for cap-ex/growth spending.  Once that growth spending decreases they will have quite a few million in free cash to pay down only ~10m in debt. 

I think that the plan is ambitious but not unreasonable.  Can things go wrong that can significantly impair the business?  Of course.
Title: Re: FIATY - Fiat S.p.A.
Post by: peter1234 on May 07, 2014, 06:24:31 AM
Thanks for pointing out slide 16. (Numbers are in billions).

I guess what makes me a bit skeptical is the lack of detail.

From 2013 to 2016 net debt stays flat despite the big capacity expansion and new launches.

Then poof, in 2018 net debt is gone.

Wonderful it they can execute this.

I also miss details on cost savings from combining Fiat & Chrysler (common platforms, purchasing, overhead, new domicile, etc. etc.)

 :) :) :)
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on May 07, 2014, 09:17:53 AM
down big today
Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on May 07, 2014, 09:22:14 AM
the share Price reaction is ridiculous
Title: Re: FIATY - Fiat S.p.A.
Post by: karthikpm on May 07, 2014, 10:18:18 AM
Fiat is a bet on a turnaround and execution. These are hard to achieve and clearly a bet on a good economy and  Marchionne .

Morningstar's view after analyst day is below

"While certainly ambitious, we think Fiat's goals are attainable. As for Alfa and Maserati, we hold out Jaguar and Land Rover as an example of highly tarnished but globally recognized premium brand names that, five years ago, were fading quickly. Today, the brands are thriving on a renewed product lineup, expanding into developing markets, and generating EBITDA margins that are the envy of the industry. We have made much more conservative volume and margin assumptions in our DCF model compared with FCA's plan, including one of the highest WACC assumptions in our auto sector coverage. We still arrive at a EUR 14 fair value estimate. Our assumptions include annual average revenue growth of 4% to EUR 104 billion and EBITDA margin expansion of 200 basis points to 11.3% at the end of our five-year forecast ending in 2018."
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on May 07, 2014, 12:56:53 PM


Fiat: on the road to recovery?


http://www.ft.com/intl/cms/s/3/39fb450a-d5c0-11e3-83b2-00144feabdc0.html?siteedition=intl#axzz30yFbN8s5 (http://www.ft.com/intl/cms/s/3/39fb450a-d5c0-11e3-83b2-00144feabdc0.html?siteedition=intl#axzz30yFbN8s5)
Title: Re: FIATY - Fiat S.p.A.
Post by: sleepydragon on May 07, 2014, 08:28:02 PM
some of the most successful business men had big goals that most other people thought impossible. many real examples. steve jobs and iPod, Elon musk and his rockets, intel and moore's law, microsoft and personal computer.



Each of these people had a new or different product, making cars /auto is a capital intensive low quality business and not quite the same

That said, I think getting to the IPO in october is a definite catalyst

I don't think it's so much different. When steve jobs came back to Apple, there were so many mp3 players out there few people thought apple can be successful in making another one. Michael Dell succeeded in the PC world. My point is profit is never at obvious places. The most successful people got rich not because they have done something that's obvious or agreeable by many people.
Title: Re: FIATY - Fiat S.p.A.
Post by: karthikpm on May 08, 2014, 06:40:24 AM

[/quote]

I don't think it's so much different. When steve jobs came back to Apple, there were so many mp3 players out there few people thought apple can be successful in making another one. Michael Dell succeeded in the PC world. My point is profit is never at obvious places. The most successful people got rich not because they have done something that's obvious or agreeable by many people.

[/quote]

Good points. I still think the projections are too optimistic/unrealistic. That is not to say there is no value in FIATY- the range of outcomes is broader than the rosy outlook presented.
Title: Re: FIATY - Fiat S.p.A.
Post by: yadayada on May 08, 2014, 06:49:26 AM
I can't really figure out what fiat's earnings are now after the take over (not including synergy). It will be around 1.5-1.7 billion euro's right? That would be a PE of around 6. Given that there will be synergy's and higher utilization of factory's, that seems way too low? So even if they do not do amazing things, there is still the replacement cycle because the average age of cars and it is just cheap on an absolute basis right now.
Title: Re: FIATY - Fiat S.p.A.
Post by: Yours Truly on May 08, 2014, 06:57:10 AM
Dumb question but does anyone know what will happen to the OTC traded shares when the company goes public on the NYSE? Will there just be transferred over?
Title: Re: FIATY - Fiat S.p.A.
Post by: investor-man on May 08, 2014, 08:23:39 AM
Dumb question but does anyone know what will happen to the OTC traded shares when the company goes public on the NYSE? Will there just be transferred over?

A definitive answer is earlier in the thread. IIRC you get a 1-to-1 transfer into the NYSE shares and it's a non-taxable event.
Title: Re: FIATY - Fiat S.p.A.
Post by: compounding on May 08, 2014, 02:39:29 PM
Marchionne and Elkann buying shares:

http://www.fiatspa.com/en-US/media_center/FiatDocuments/2014/Maggio/The_Chairman_and_the_Chief_Executive_Officer_of_Fiat_Purchase_Fiat_Shares.pdf
Title: Re: FIATY - Fiat S.p.A.
Post by: racemize on May 08, 2014, 03:08:33 PM
Marchionne and Elkann buying shares:

http://www.fiatspa.com/en-US/media_center/FiatDocuments/2014/Maggio/The_Chairman_and_the_Chief_Executive_Officer_of_Fiat_Purchase_Fiat_Shares.pdf

I love the presentation of the buying.
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on May 08, 2014, 03:13:46 PM
Marchionne and Elkann buying shares:

http://www.fiatspa.com/en-US/media_center/FiatDocuments/2014/Maggio/The_Chairman_and_the_Chief_Executive_Officer_of_Fiat_Purchase_Fiat_Shares.pdf

I love the presentation of the buying.

What do you mean the presentation? Are you talking about the press release?
Title: Re: FIATY - Fiat S.p.A.
Post by: racemize on May 08, 2014, 03:27:59 PM
Marchionne and Elkann buying shares:

http://www.fiatspa.com/en-US/media_center/FiatDocuments/2014/Maggio/The_Chairman_and_the_Chief_Executive_Officer_of_Fiat_Purchase_Fiat_Shares.pdf

I love the presentation of the buying.

What do you mean the presentation? Are you talking about the press release?

I just mean how the announcement of the buyback was presented.  It doesn't get more direct than that.
Title: Re: FIATY - Fiat S.p.A.
Post by: argonaut on May 08, 2014, 03:31:09 PM
Just curious...anyone adding to their position since it dropped? I am pondering since I still think it will come up when the NY listing is complete later this year..
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on May 08, 2014, 03:36:25 PM
Marchionne and Elkann buying shares:

http://www.fiatspa.com/en-US/media_center/FiatDocuments/2014/Maggio/The_Chairman_and_the_Chief_Executive_Officer_of_Fiat_Purchase_Fiat_Shares.pdf

I love the presentation of the buying.

What do you mean the presentation? Are you talking about the press release?

I just mean how the announcement of the buyback was presented.  It doesn't get more direct than that.

Yes okay, I was overthinking it too much.



Anyways, nice to see the 2 guys stepping up and buying some shares.
Title: Re: FIATY - Fiat S.p.A.
Post by: karthikpm on May 08, 2014, 05:09:40 PM
Just curious...anyone adding to their position since it dropped? I am pondering since I still think it will come up when the NY listing is complete later this year..

Added to position today +1
Title: Re: FIATY - Fiat S.p.A.
Post by: Phaceliacapital on May 08, 2014, 11:16:11 PM
I like the announcement, but to be frank I don't think 1 mn is a substantial amount for these guys
Title: Re: FIATY - Fiat S.p.A.
Post by: jay21 on May 09, 2014, 05:29:58 AM
The negative view of FCA's product line up:

"Meanwhile, neither of the merged firms has any presence worth mentioning in China, the key global volume-driving market. For the moment, FCA is functionally little more than an Italian luxury car company (the Ferrari and Maserati brands) and an American truck and SUV company (Ram and Jeep) propping up a number of loss-making attempts at volume car brands. In some respects, the fact that Fiat and Chrysler even made it through their first five year plan is an impressive achievement, but the onus is on Marchionne to explain how his patchwork empire is worth more than the sum of a few of its parts."

"But with the U.S. subprime auto loan market showing signs of mounting risk, and gas price pressure growing, the U.S. truck and SUV sales boomlet on which the company's fortunes rely is looking decidedly fragile. Even if a gas price shock or credit crunch doesn't take out FCA's key profit centers, the inevitable cooling of U.S. auto loan expansion will cut heavily into its projected 48 percent sales growth in North America. If continued anticorruption campaigns in China further affect luxury car demand there, Maserati's four-fold projected increase in volume (another key profit contributor in FCA's plans) is in similar trouble."

"After all, FCA's mass market plans are only just taking shape. Having initially presented Chrysler as a pseudo-luxury brand in its 2009 plan, the latest presentation saw a rapid about-face, with Chrysler now being positioned as a mass-market volume brand, taking on Ford and Toyota with an expanded lineup. Yet the first new Chrysler models won't actually hit showrooms until 2016 at the earliest, and then the only new models are a re-badge of the lukewarm Dodge Dart compact and a a plug-in hybrid version of the Town & Country Minivan. New full-size and mid-size crossovers won't debut until 2017 and 2018 respectively, and there's no sign that Chrysler will compete at all in the fast-growing compact crossover segment. Having slashed R&D to the bone to keep the lights on for the last five years, FCA desperately has to fill a yawning abyss where its new product pipeline should be."

http://www.bloombergview.com/articles/2014-05-08/fiat-chrysler-s-five-year-road-to-ruin

Title: Re: FIATY - Fiat S.p.A.
Post by: phil_Buffett on May 09, 2014, 05:51:31 AM
another worthless article. the press and super high intellegient analysts (who are all billionares because the are every time right) nooo :D haha)

dont bother me. for me it is important

pro:

great brands

ferrari is one of the best brands in the world. piech from VW dreams every night about it, he would get multiple orgasm if he could buy it.
every Young peope dreams to buy and own a ferrari in the future. they say ferrari and not dream about a Bentley or so on.

maserati is also a very great brand. very high and premium. the People who buy this car dont care about Price. and the Goal from maserati to achieve 75k. sales is nothing in comparison to millions of car sales world wide.

then we have Jeep, ram and dodge. i love Jeep. i see here in Germany a lot of Jeeps. everytime i feel good when i see one. great car. the Wrangler and the Grand.   the pent up demand in North america is still there. so much old cars. so this will stay for the next few years.

europe Auto market bottoms actually. will someday in the future also rise again.

you have great leadership with Sergio and the elkann´s (exor) the understand what value means. i saw in exor presentation all lot about ben graham. i like this very much. i dont see all lot of companies who knows ben graham.

the risks are a sudden Crash in Japan or China and a new recession. the high debt load of fiat Group and the potential alfa flop, if it does not work the Revival of alfa.

but in the end i have a Company today that is trading significant less then the intrinsic value of it. so this here is Minimum 14€ fair value. at least

so i dont care about media, analysts or something else. even if fiat only rise to 14€ in the next 3 years if have more than 30% yield per year. perfect!!

what will be in 2018? i dont care.

Title: Re: FIATY - Fiat S.p.A.
Post by: wbr on May 09, 2014, 06:47:08 AM
Ofc the turnaround can go wrong or the goals can only be partially achieved. Ofc any recession in a key market can impair the progress, but even then there is tremendous value from all the existing assets. That's what value investing in it's core is about: Buying a company where you win big when things go right, still win when some things go wrong and don't lose a lot when everthing goes wrong.

I think that's is the important take-away here and I rarely see an analyst who get's this (I guess that's why they are analysts and not fund managers...). They just see the problems and what possibly could go wrong (or the exact opposite when a company is overhyped). But the question to ask is how much do I pay for this "set of future results" represented by a particular company?

In the case of Fiat Chrysler at 7.50 Euros the answer is imo: Not much.
Title: Re: FIATY - Fiat S.p.A.
Post by: investor-man on May 09, 2014, 08:50:05 AM
another worthless article. the press and super high intellegient analysts (who are all billionares because the are every time right) nooo :D haha)

dont bother me. for me it is important

pro:

great brands

ferrari is one of the best brands in the world. piech from VW dreams every night about it, he would get multiple orgasm if he could buy it.
every Young peope dreams to buy and own a ferrari in the future. they say ferrari and not dream about a Bentley or so on.

maserati is also a very great brand. very high and premium. the People who buy this car dont care about Price. and the Goal from maserati to achieve 75k. sales is nothing in comparison to millions of car sales world wide.

then we have Jeep, ram and dodge. i love Jeep. i see here in Germany a lot of Jeeps. everytime i feel good when i see one. great car. the Wrangler and the Grand.   the pent up demand in North america is still there. so much old cars. so this will stay for the next few years.

europe Auto market bottoms actually. will someday in the future also rise again.

you have great leadership with Sergio and the elkann´s (exor) the understand what value means. i saw in exor presentation all lot about ben graham. i like this very much. i dont see all lot of companies who knows ben graham.

the risks are a sudden Crash in Japan or China and a new recession. the high debt load of fiat Group and the potential alfa flop, if it does not work the Revival of alfa.

but in the end i have a Company today that is trading significant less then the intrinsic value of it. so this here is Minimum 14€ fair value. at least

so i dont care about media, analysts or something else. even if fiat only rise to 14€ in the next 3 years if have more than 30% yield per year. perfect!!

what will be in 2018? i dont care.

+1
Title: Re: FIATY - Fiat S.p.A.
Post by: txlaw on May 09, 2014, 08:54:22 AM
I think the best thing to ask ourselves is: what is the worst case scenario for Fiat? 

Major dilution, probably.  Well, what's the downside risk if there is major dilution?  I'm thinking it's pretty low.  It reminds me of BAC at sub $8.  OK, dilution is on the table.  So what.  Low downside risk, potentially high upside return is the name of the game.

How many of you would participate in a rights offering that occurs as FCA lists on the US markets?  I would.
Title: Re: FIATY - Fiat S.p.A.
Post by: fareastwarriors on May 09, 2014, 01:02:29 PM
Chrysler Recalls 780,477 Minivans for Possible Overheating Switch


http://www.nytimes.com/reuters/2014/05/09/business/09reuters-chrysler-recall.html?src=busln&_r=0 (http://www.nytimes.com/reuters/2014/05/09/business/09reuters-chrysler-recall.html?src=busln&_r=0)
Title: Re: FIATY - Fiat S.p.A.
Post by: karthikpm on May 10, 2014, 05:18:54 PM
http://www.marketwatch.com/story/maserati-alfieri-coupe-coming-in-2016-2014-05-10

Part of the grand strategy
Title: Re: FIATY - Fiat S.p.A.
Post by: Kiltacular on May 10, 2014, 08:11:23 PM
I think the best thing to ask ourselves is: what is the worst case scenario for Fiat? 

Major dilution, probably.  Well, what's the downside risk if there is major dilution?  I'm thinking it's pretty low.  It reminds me of BAC at sub $8.  OK, dilution is on the table.  So what.  Low downside risk, potentially high upside return is the name of the game.

How many of you would participate in a rights offering that occurs as FCA lists on the US markets?  I would.

This is exactly how I'm looking at this -- the market responded as if they will be forced to raise equity.  I think you're right that it is now priced in. 

This remains a bet on Marchionne and his support from Elkann.  I am impressed with them so far.  I think they have a lot more leverage over the Italian unions after the Chrysler deal.  The only thing I'm not sure I understand, at this point, is how much flexibility they retain to adjust the plan they've just proposed -- that is, is implementing the "plan" necessary for survival? 

Or, is it "aspirational"?

As an auto executive, Marchionne so far seems to be a man among boys and given he's signed on for the next 5 years, as long as he retains Elkann's and the family's support, I think Marchionne's proven he's got a lot of rabbits in his hat.

Title: Re: FIATY - Fiat S.p.A.
Post by: Palantir on May 11, 2014, 09:22:09 AM
Anyone know how Alfa can fit into the lineup? I see that Maserati is going to be the main luxury brand, which I like, but where does Alfa fit in? Super high end is Ferrari land and midway is Chrysler land, and below that is Dodge.


What I'd prefer they do is relaunch Alfa as an electric brand, that would be truly revolutionary.
Title: Re: FIATY - Fiat S.p.A.
Post by: vpagano on May 11, 2014, 10:03:40 AM
Off the top of my head, I believe the previous plan was to slot Alfa in from high-Chrsyler to low-Maserati. Originally, they would be sold at the top Fiat dealerships to join with the Italian flair and then eventually go to the Maserati dealerships.

http://www.autoblog.com/2014/02/24/best-us-fiat-dealers-get-alfa-romeo-franchises/
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on May 11, 2014, 10:57:18 AM
Chrysler, Fiat ~ VW
Alfa ~ Audi
Maserati ~ Porsche
Ferrari > Lambo
Title: Re: FIATY - Fiat S.p.A.
Post by: Palantir on May 11, 2014, 12:08:49 PM
Audi is way too broad in the luxury segment as a competitor against Alfa...
Title: Re: FIATY - Fiat S.p.A.
Post by: PlanMaestro on May 11, 2014, 01:33:16 PM
Not at the beginning

http://www.businessweek.com/stories/2005-03-13/hot-audi
Title: Re: FIATY - Fiat S.p.A.
Post by: Kiltacular on May 11, 2014, 11:56:01 PM
Ch