By Peter Ward October 23, 2015
Ferrari IPO Prices at High End
Ferarri. ©Eddy Clio
Ferrari shares climbed 5.8% on Wednesday, as the company made its stock market debut.
Trading with the ticker RACE, Ferrari stock opened at $60 per share, 15% higher than its initial offering price.
Shares closed the day at $55, giving the company a market value of around $10.4 billion, according to Bloomberg.
Ferrari is part of Fiat Chrysler Automobiles, which plans to spin off the supercar manufacturer over the next year. The first stage of the process was this week’s IPO, which offered just 10% of the Ferrari unit.
The share sale, which will raise more than $4 billion for Fiat Chrysler, is part of a push by the parent company to finance a $54 billion investment to expand its Jeep, Alfa Romeo and Maserati brands globally. Fiat Chrysler intends to distribute its remaining 80% share in Ferrari to its own investors early next year.
The modest jump in Ferrari shares comes in spite of unfavorable IPO conditions. Three companies this month have suffered setbacks with their IPOs. Digicel Group canceled its listing completely; First Data priced shares below its marketed range; and Albertsons postponed its market debut.
Piero Lardi Ferrari, the son of the brand’s founder, became a billionaire as a result of the listing. He owns around 10% of the eponymous company, which was worth $982.28 million at the initial listing price. With cash and other assets, Forbes reports he is now worth more than $1.3 billion.
Yahoo’s Video Fail
Yahoo has admitted defeat in its attempts to produce original video content, announcing on Tuesday it will be taking a $42 million write-down on its video division.
Yahoo CFO Ken Goldman. ©tiernantech
“We thought long and hard about it,” Yahoo chief financial officer Ken Goldman said on an earnings call. “What we concluded is [that] certain of our original video content, we couldn’t see a way to make money over time. I’m thinking of Community, I’m thinking of Sin City Saints and so forth. So there, where we had spent money and had some assets on our balance sheet, we elected to write those off.
Yahoo unveiled its line-up of original TV shows in April, following the examples of Netflix and Amazon, other technology companies producing their own content. But Yahoo relied on advertising rather than subscription fees, which led to one episode of cult comedy Community being structured entirely around Honda’s new car. Despite the failure, Yahoo has not ruled out trying to produce original video content again in the future.
Yahoo’s quarterly earnings report, released on Tuesday, missed analyst estimates and disappointed investors. The company projected fourth quarter sales of between $920 million and $960 million, below analyst predictions of $1.08 billion.
Yahoo shares fell by as much as 5.6% in after-hours trading on Tuesday and are down around 35% this year.
Amazon to Hire 100,000 for Holiday Season
Amazon warehouse in Spain. ©Marilin Gonzalo
Amazon is hiring 100,000 temporary workers this holiday season, a 25% increase from last year, the company announced on Tuesday.
Large retailers in the U.S. create thousands of temporary positions in order to cope with extremely high demand over the festive season. The Wall Street Journal reports that this year Amazon has hired more than Target (70,000), Macy’s (85,000) and Wal-Mart (60,000), which all maintained steady numbers of temporary hires.
This year Amazon has added 18 warehouse facilities worldwide, bringing its total to 173, as it looks to lower delivery times and costs. Amazon also recently hired 25,000 full time workers.
Amazon surpassed Wal-Mart’s market capitalization this summer and has increased its lead since. Wal-Mart is still the world’s largest company by revenue, but Amazon’s market cap of $262.5 billion dwarfs Wal-Mart’s $190 billion.
FT Publishes Climate Change Calculator
Mongolian desert. ©Asian Development Bank
The Financial Times published an interactive graphic on Tuesday that allows readers to create their own model to curb global greenhouse gas emissions and fight climate change.
The Climate Change Calculator and the accompanying article show how much needs to be done to ensure there is only a 2°C average global temperature increase by 2100. The world is currently on course for a 6°C change, according to research from a team based at Imperial College London and the Indian Institute of Science in Bangalore. They say that would radically alter the planet’s climate. That figure would only be lowered to 5°C if the pledges put forward for climate talks in Paris in December for emission cuts between 2020 and 2030, are met. The Paris Conference of the Parties (COP21) event will see over 200 countries meet to decide the first new global climate change agreement in 18 years.
The calculator enables readers to first go through the plans that are already in place, and how they will affect the climate. Readers can then create their own models.
One problem, according to the article, is that businesses in the E.U. and the U.S. face much tougher emission regulations than those in China, Japan and Australia. The commitments made by the E.U. and U.S., set to be presented in Paris in December, are four times higher than China’s and 1.5 times higher than Japan’s.
The disappointing contributions from China, Australia, Russia and Japan will reduce their greenhouse gas emissions, but not by enough to reduce serious climate change, according to the article’s author.
Star Wars Breaks Sales Records
Star Wars action figures. ©Rooners Toy Photography
On Monday night, tickets for the new Star Wars movie, Star Wars: The Force Awakens, went on advance sale, and the record-breaking crush of purchases crashed several ticket websites.
Ticketing website Fandango said its website traffic surged to seven times its normal peak levels, and The Force Awakens beat the previous first day pre-sales record holder, The Hunger Games, by a multiple of eight.
Imax reported $6.5 million in advance ticket sales for the U.S. and Canada, eclipsing by far sales for previous blockbusters such as The Avengers, The Hunger Games: Catching Fire and The Dark Knight Rises, which all brought in around $1 million each, according to Deadline.
The movie is the first sequel to the space opera trilogy, which debuted in the 1970s, and the first release since Disney bought Lucasfilm, and rights to the Star Wars franchise, for $4 billion in 2012.
The movie will be released on December 18 in the U.S., and Disney hopes it can beat the $208.8 million Jurassic World made in its opening weekend earlier this year. Judging by early sales numbers, Disney will likely succeed, but doubt remains over how much the movie can make in the global market. The film did not secure a 2015 release in the world’s second largest movie market in the world: China.
