Fiat Chrysler Automobiles stock fell 29 cents Thursday to $11.18 per share following the automaker announcing it priced an offering of 87 million common shares at $11 each — 4 percent lower than the stock’s Wednesday closing price.
The company also announced the pricing of $2.5 billion in bonds which will be converted into FCA shares by Dec. 15, 2016. Fiat Chrysler has already sold the shares and bonds, but officials don’t expect the shares to be trading until next week.
The moves are part of an elaborate plan by Fiat Chrysler CEO Sergio Marchionne to raise capital to fuel an ambitious five-year growth strategy for the world’s seventh-largest automaker through 2018.
Fiat Chrysler began trading on the NYSE under “FCAU” on Oct. 13, but no new shares were offered. They were just shares of Fiat SpA, which merged into Fiat Chrysler, transferred from the Italian stock market to New York.
Since Fiat Chrysler entered the NYSE, analysts have been somewhat bullish on the long-term viability of the stock — particularly since it was announced that Fiat Chrysler shareholders would also get shares of Ferrari during its expected public offering between the second and the third quarter of 2015.
“Fiat Chrysler Automobiles is a risky investment, but we believe it is the most underrated auto manufacturer (imported) from Detroit and the best risk-adjusted return vis-a-vis GM and Ford,” said analyst Adam Jonas at Morgan Stanley in a note to investors.
In late-October, Fiat Chrysler announced plans to sell 10 percent of Ferrari in an IPO and distribute the rest of its 80 percent ownership to Fiat Chrysler shareholders for free.
Since the Oct. 29 announcement, Fiat Chrysler shares have risen more than 40 percent.
Separately, on Thursday, Fiat Chrysler squashed media reports of Ferrari moving its fiscal headquarters outside Italy to save on taxes. The company called the reports “rumors” that “have no grounds.”
“There is no intention to move the tax residence of Ferrari S.p.A. outside Italy, nor is there any project to delocalize its Italian operations, which will continue to be subject to Italian tax jurisdiction,” the company said in a statement.
The racing and sports car manufacturer was founded in 1929 by Enzo Ferrari. Fiat SpA, Chrysler Group’s former parent company, acquired 50 percent of Ferrari in 1969, then expanding its stake to the current 90 percent. The remaining 10 percent of Ferrari is owned by Piero Lardi Ferrari, a son of company founder Enzo Ferrari.