Solved HBR Case Solution: Ferrari: The 2015 Initial Public Offering By Michael J. Schill (Download Now)
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Description
Solved HBR Case Solution: Ferrari: The 2015 Initial Public Offering By Michael J. Schill
Solution Pages: 4
Files that you will download:
Word (.docx) & Excel (.xlsx)
Questions Covered in the Solution
Quantitative:
- Discounted Cash Flow for 5 Years
- Determine price of Stock
Qualitative:
- Problem Description (1 Paragraph)
- Assumption and Process of DCF Calculations
- Interpretation of final numbers and recommendation/ analysis
Sample of Solution
Ferrari has been planning to offer 10% of its stake over NYSE to raise capital of around € 900 Million. After IPO, it would eventually be an independent company, leaving the umbrella of Fiat Chrysler Automobiles (FCA). However, FCA analysts has targeted the price range for IPO to be around $ 48 to $52 to have a total of 189 million from 172 million before IPO. Although, company management is excited to raise capital to execute their expansion strategy, it is also critical of the valuation, as undervaluation would result in leaving money on the table while overvaluation can impair investors’ confidence due to post-IPO vulnerabilities. Although, as per the interest reports, market is also excited about Ferrari IPO and it is estimated that the deal may be 10 time oversubscribed. This effectively provides FCA analyst more buffer in targeting for their eventual IPO price.
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