Chrysler Seems Hesitant about IPO — UAW, Board & Banks Mull Price


The Wall Street Journal

Chrysler Seems Hes­i­tant to Come Out with IPO—Dealer’s Concerned?

AIN Edi­to­r­ial Positioning:

The whole prob­lem that is caus­ing the delay of the IPO is appar­ently the uncer­tainty about what the Ini­tial Pub­lic Offer­ing price ought to be. Plus, appar­ently the Board and Mar­chionne are work­ing on bring­ing the UAW on board and buy­ing out the remain­der of the stock.

So— then there is the issue of the con­ver­sion of Chrysler from a lim­ited lia­bil­ity com­pany to a full blown cor­po­ra­tion may be mud­dy­ing the IPO waters with the IRS giv­ing Chrysler mixed sig­nals. Fur­ther­more, the United Auto Work­ers Trust that owns 41.% of the com­pany has to be involved in the final pric­ing of the IPO Stock Sales.

Worse yet is that Mar­chionne is appar­ently some­how opposed to the whole idea of the IPO because he and Fiat think that the stock sale will affect the deal with the United Auto Trust group and the price that Fiat has to pay for Chrysler.

Chrysler hopes to gain as much as $2B from the IPO. That would make the value of Chrysler some­where between $9B to $13B.

Deal­ers with Chrysler stock should do well, and may have the inside track to buy more stock as the even­tual IPO comes down.