Chrysler's IPO: Big Go or No-Go?

Chrysler made big news last week when it filed a registration statement, the first step toward an initial public offering.

In this segment of "Motor Money", analysts Rex Moore and John Rosevear discuss whether we'll even see this IPO happen and, if so, whether Chrysler's stock might be a compelling buy. (You can see the complete "Motor Money" show here.)

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  • Report this Comment On October 03, 2013, at 1:48 AM, LouisTewl wrote:

    I have tried, through this comments section, (because this is the only way I have found to be able to contact John Rosevear), to get him, or anyone at TMF, for that matter, to comment on what effect(s) (positive, negative, neutral) a Chrysler IPO and/or completed Chrysler/Fiat merger would have for/on CURRENT Fiat shareholders, but all they talk about is what's going on now--which everybody already knows, and, about which, frankly, this "interview" is just another rehash. Why can't TMF analyze this situation in depth beyond whether Chrysler IPO stock would be worth owning? With all due respect, a senior global auto industry analyst worth his salt should be able to give TMF followers something more--or is that premium content now? Further, I get the distinct impression that the main purpose of this "interview" is to lead loyal readers to the unrelated premium report teaser at the bottom of the article? Sign me-


  • Report this Comment On October 03, 2013, at 4:31 PM, TMFOrangeblood wrote:

    Thanks for the comment, LouisTewl. I'll make sure we address this in an upcoming show, and will comment here when we do.

  • Report this Comment On October 04, 2013, at 12:51 PM, TMFMarlowe wrote:

    @LouisTewl, this is the first I've seen of your requests -- but I've been traveling this week, and have not been keeping up with comments very well, for which I apologize. We certainly can and will talk about this (maybe) deal from the Fiat perspective, but likely not until next Tuesday or Wednesday.

    The short answer is that I think the best outcome for Fiat is a clean merger with Chrysler, and that to the extent the IPO serves as an obstacle to that, it's not good. That's the easy answer.

    Marchionne has certainly been trying hard to talk down the IPO's price with dire scare stories about Fiat walking away from Chrysler if it happens, but what Fiat would actually do and how it would be affected if the IPO goes forward is a more complicated question. We'll try to explore that soon.

    John Rosevear

  • Report this Comment On October 05, 2013, at 12:35 AM, LouisTewl wrote:

    Thanks for that, John (and Orangeblood). My comments were originally posted on your 9/24 article-I had to establish a new screen name since then because of numerous sign-in difficulties with this site-but that's another story--however, I went back to that article and copied my comments posted there, pasted here (below). I look forward to more intel on the deal! Thanks again.

    From 9/24:

    >My whole question, which I have yet to see addressed anywhere, is how (if at all) will existing Fiat shareholders benefit from a Chrysler IPO? Will they automatically be granted access to the IPO?

    Will there be some sort of conversion? What exactly are the potential effects for current Fiat shareholders?

    Everybody's real quick to weigh in on Chrysler, which is relatively easy, and, by the way, I think you all are wrong in your undervaluation of Chrysler as an entity, (which I see as a result of provincial thinking), as they are in planning to expand into the China market.

    Otherwise, I agree with most points in the above article, but it's not really anything not already known--so, finally, I really think the million dollar question(s) are the ones I raised here. Anybody?<

  • Report this Comment On October 05, 2013, at 10:54 AM, TMFMarlowe wrote:

    Dude, everybody who isn't already there is "planning to expand into the China market". It's one thing to talk about it, it's another thing to have the right JV partners and the right manufacturing situation and etc. It's not "provincial thinking' to say that it's way too early to start counting the money from China in Chrysler's case. The strength of the Jeep brand gives them a lot of potential, but it's already a pretty crowded field over there. Ford is one late arrival to China that is managing to do well, but Ford is spending $5b building out plants and distribution in Asia, and frankly their cars are better than Chrysler's right now. Talk to me when Jeep has 2-3% of China's SUV market, after we've seen a couple quarters' worth of significant revenues from China and learned how they're being reinvested, split with the JV partner(s), etc., and then we'll see.

    As to your million dollar questions, there's no conversion or anything else for existing Fiat shareholders. None of the Chrysler stock owned by Fiat is being offered, and there's no new stock being offered. This offering is for just (a portion of) the VEBA's existing holdings.

    The main potential effect for Fiat shareholders is that this IPO could disrupt Fiat's plans to merge with Chrysler, which is what I've been talking about since the S-1 was filed.

    I think it's too early to try to quantify the potential effect of a disruption on Fiat stock, but it wouldn't be good. I don't think either of them can really go it alone and thrive at this point, as I've said.

    John Rosevear

  • Report this Comment On October 19, 2013, at 6:57 PM, LouisTewl wrote:

    I previously posted a reply to your above reply, but, as I don't see it here, I can only surmise it was deemed inappropriate--however, I have responded to your most recent 'interview' article today, Saturday, 10-19, in the comments section.

    To surmise, I think the one most clarifying disclosure by TMF is that they are long Ford, GM, & Tesla.

    Understandably, they are not going to be beating the drum for Fiat/Chrysler, and, with that understanding, it becomes easier to see how/why they damn F/ with faint praise and coverage.

    I'm a big buyer and supporter of FIATY as the only conduit into what I believe will be the most successful American auto mfger story to come out of 'The Great Recession.'

    Come 2015, all will be known, especially by FIATY shareholders.

    Hide and watch.

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