Fiat hits skids as Ferrari makes Milan debut

Fiat distributed its 80% stake in Ferrari to shareholders over the weekend, having announced the spinoff over a year ago.

Ferrari, which made its debut on the New York Stock Exchange in October, began trading in Milan under the ticker RACE at €43.

Ferrari is controlled by Exor SpA, the holding company owned by the Agnelli family, which also controls Fiat Chrysler.

On Monday the sports car maker's free float should increase from 10% to 67%, with Piero Ferrari and Exor holding 10% and 23% respectively - and having signed a co-operation agreement to protect Ferrari from a hostile takeover.

Analysts at Exane said: "Given that we believe many investors that had held FCA for Ferrari will likely have already sold out (given the valuation of the latter has been proven), we expect material selling pressure from those FCA holders more interested in the stub FCA story than owning Ferrari at 300% EV/Sales."

But they predicted the EU listing should see the shares benefit from some technical buying from index funds, estimating circa€50m in incremental demand, versus circa €70m daily trading volume under the US listing.

The broker set an EU target price at €43 and said it believed the significant increase in supply of Ferrari equity should outweigh the impact of index buying in the short term.

At 0905 GMT, Fiat Chrysler shares were down 33% to €8.54 and Ferrari was down 2% to €42.56.