Traders of Fiat S.p.A. shares expect a "crazy" day on the first Monday of 2011 when investors assign their first value to the two stocks formed from the biggest reorganization in Fiat's 111-year history.
In an average estimate of analysts compiled by Bloomberg, the new company, Fiat Industrial S.p.A., whose primary assets are truck and tractor makers Iveco and CNH Global NV, could reach EUR9.40 on the Milan exchange on Jan. 3, 2011.
Shares of both Fiat and Fiat Industrial may fluctuate on the first day because Fiat hasn't given an indication of the stocks' valuation and Fiat's profit forecasts don't take into account a Chrysler Group LLC stake.
Estimates show that Fiat's auto division may trade at EUR6.65, implying the two stocks combined would be 7.1 percent more than the old Fiat's close on Dec. 29, 2010.
With a recent market value of EUR18.4 billion ($24 billion) and whose first car was the 4 HP developed in 1899, Fiat had gained 44 percent since announcing the spinoff on April 21, 2010.
Investors are getting a Fiat Industrial share for every Fiat share they hold. Head of listings at Borsa Italiana, Nunzio Visciano, said the Milan exchange has no plan to take orders in the pre-opening auction phase on Jan. 3.
Alessandro Capuano, head of the Italian trading desk for IG Markets in Milan, doesn't remember an operation of such type in Milan, especially with a company like Fiat. He added that "it could be a highly volatile trading day." [via Bloomberg]