Tag: FCA

  • Fiat Chrysler Stock to Watch in December 2019

    Fiat Chrysler Stock to Watch in December 2019

    Fiat Chrysler Stock to Watch in December 2019
    FCAU could be a solid portfolio addition since Fiat Chrysler Automobiles is a good investment.
    The labor concerns are solved and Fiat Chrysler can switch its attention to its merger with Peugeot owner, PSA Group.

    Of course, you will watch the stocks you like, but our choice of stock to watch in December is Fiat Chrysler. On Monday, December 2, its shares were changed a bit since the Fiat Chrysler stated that the automaker made an agreement with the United Auto Workers (UAW) over the last weekend. It looks that Fiat Chrysler Automobiles will avoid a strike. Previously, General Motors and Ford made agreements with the UAW.

    So, it will be interesting to watch this stock in December and how this agreement will influence the stock price.

    The UAW revealed some parts of the agreement. According to UAW Fiat Chrysler will invest $9 billion to add 7,900 jobs in the next four years. The negotiations were focused on benefits, salary, and job security. The deal is expected to be reviewed by UAW’s national council on Wednesday, December 4. If UAW’s council confirms it, the next step is Fiat Chrysler union members to ratify it. It should be happening on Friday.

    The smart choice made Fiat having in mind how big financial damage experienced General Motors during the UAW strike in September and October.

    General Motors’s revenue declined 1% in the third quarter,  net income fell by nearly 9%. But that is not the end, General Motors easy could experience further downs next year when its Q4 earnings report is expected.

    With this deal, Fiat Chrysler opened a space to continue with the merger with Peugeot owner PSA Group. The past tries to couple with this European car company, didn’t result in a union. 

    The Fiat Chrysler’s problems grow

    The Schall Law Firm announced the filing of a class-action lawsuit against Fiat Chrysler Automobiles N.V. (NYSE: FCAU) for violations of the Securities Exchange Act of 1934 and Rule 10b-5 declared thereunder by the U.S. Securities and Exchange Commission.
    Investors who bought the Fiat securities between February 26, 2016, and November 20, 2019, didn’t have the real data, according to the law firm.

    According to the Complaint, Fiat Chrysler presented incorrect and misleading reports to the market. Fiat joined in a bribery system created to obtain beneficial terms from labor unions for its collective agreements. The top-level management was engaged or had information about the schemes. The law firm said that Fiat’s “public statements were false and materially misleading throughout the class period.” When the market noticed the facts about Fiat, investors experienced losses. Some of them have losses above $100,000.
    The Schall Law Firm represents investors all over the world and specializes in securities class action lawsuits and shareholder rights litigation. 

    Fiat Chrysler (FCAU) stock price

    Fiat Chrysler Stock to Watch in December 2019

    Fiat Chrysler stock was traded at $14.73 on Monday which was a decline of 0,14 %. Today it is $14.760 with an increase of 0.1017%. It is a good company, the stock can provide a good return, so we can say it is a lucrative investment option.

    Based on Traders-Paradise’s calculations, this stock is a good long-term investment. In the 5-years period, the revenue on your investment could be about 40% and the stock might worth above $20 at the end of that period.

    The analysts forecast for Fiat Chrysler Automobiles a median target of $17.85. A high estimate is about $20 and a low estimate is around $12. The future price of the stock is predicted at $28.799 after a year according to some other analysts. On 2019 December 03, the current price of FCAU stock is $14.765 and our data shows that the stock price has been in a downtrend for the past 12 months.

    FCAU stock price has been presenting a declining tendency but Check our tool to determine the best exit strategy.

     

  • Fiat Chrysler and Peugeot Merger

    Fiat Chrysler and Peugeot Merger

    Fiat Chrysler and Peugeot Merger

    Fiat Chrysler Automobiles will merge with PSA Groupe, owner of Peugeot automobiles

    Fiat Chrysler (FCA) and Groupe PSA (Peugeot is the largest PSA brand), have agreed to continue a merger. That would form the fourth-largest carmaker in the world. Their boards are working together on a new relationship. The Wall Street Journal reported the companies are moving forward with a merger. Both companies confirmed this news.

    The merger will give shareholders of each group equal ownership in the new entity.

    On Thursday morning both companies stated that their boards have a mandate to finalize the negotiations in the next few weeks, which means FCA will not tie-up with Renault as was thought this summer.

    The merger would create a company with revenues of €170bn, with an operating profit of over €11bn and vehicle sales of 8.7m. That would lead them ahead of General Motors and Hyundai-Kia in sales. The new potential entity would have a market value of between €45-50bn.

    The model of the merger is a 50-50 all-stock.

    PSA is listed on the Euronext Paris stock exchange.

     Fiat Chrysler and Peugeot Merger

    Since 2014, FCA is officially listed on the NYSE.

     

    After the Fiat Chrysler and Peugeot Merger 

    When the two companies do a merger, PSA chief executive Carlos Tavares is assumed to lead that new group while John Elkann, Fiat Chrysler’s chairman will hold the same position at the new entity.
    Despite this speed, a final agreement of merger needs time and regulatory scrutiny.

    According to Reuters, a merger between FCA and PSA could build a “$50-billion giant better placed to tackle a host of costly technological and regulatory challenges facing the global auto industry.” Details were not published, but some aspects have known.

    For example, the Journal published that the new company would be “legally domiciled in the Netherlands,” with “operational headquarters in the U.S., France, and Italy.”
    Further details and any influence on employment are not yet transparent. The known fact is that FCA has plans to add nearly 5,000 jobs to the Detroit factory to build SUVs. So, the obvious conclusion is that a merger would eventually help FCA in Detroit.

    It isn’t a secret that the Peugeot Group has plans to re-enter the U.S. market. The merger with FCA would provide it through the Chrysler/Dodge/Jeep/Ram dealer network.
    To adjust the value of the two companies, the PSA shareholders should get about a €3bn dividend from the sale of the 46% stake in parts carmaker Faurecia.
    FCA shareholders will receive a €5.5bn ($6.12 billion) cash payout and incomes from the sale of its robot-making Comau unit, estimated at between €200m to €300m.

    New headquarters

    The new group will be based in the Netherlands, a neutral location, where FCA is domiciled and listed in Paris, Milan and New York. The Financial Times reported the FCA will “continue to maintain a significant presence in the current operating head-office locations in France, Italy and the US.”

    Around €3.7bn in predicted annual run-rate synergies are targeted, 80% during the first 4 years. The total one-time cost of achieving the synergies is estimated at €2.8bn, the two companies revealed in the statement.

    Bottom line

    Carmakers are facing large investments in electric cars. That is the reason behind the merge. Costs. This merger would create one of the biggest carmakers groups in the world with well-known brands Citroen, Jeep, Opel, Alfa Romeo, Peugeot, and Vauxhall. This has the potential to be a true rival to Volkswagen, Toyota and the Renault-Nissan Alliance.

    The merger of those two companies looks as wise given the global competition, capital power, and industry complexity from autonomous technologies.

    This could create a global automotive leader.