Ferrari changes its tune

ONCE, the most trusted brands in the world were those associated with soft-drinks, fast-food, detergents, motor cars and petroleum. That has all changed. Of the ten most valuable brands today, all bar one is a tech company of one sort or another. Apple rules with an estimated brand value of $105 billion, according to Brand Finance's 2014 Global 500 index. Samsung follows with a $79 billion brand value. Then come Google, Microsoft, Verizon, General Electric, AT&T, Amazon, Wal-Mart (the exception) and IBM. Once dominant Coca-Cola now ranks twelfth. Even before its emissions-cheating shenanigans, Volkswagen was a modest nineteenth.So what to make of the market valuation awarded supercar-maker Ferrari, of Maranello, Italy, following its recent initial public offering on the New York Stock Exchange' As a small auto firm, Ferrari ought to trade on the stock-market with a price/earnings (p/e) ratio of around the sector's average of 13 or so. However, opening as it did at $52 a share, the appetite for the company's stock implied a p/e three times greater. That is the upper end of the luxury-goods market.That is precisely how Fiat Chrysler...Continue reading
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