Fiat Chrysler shares took a dive today (Jan. 4) after the company officially relinquished its stake in famed supercar maker Ferrari. The stock opened one-third below last week’s closing price and was down as much as 37% in late morning trading on the New York Stock Exchange.
The completion of the Ferrari spinoff may make it easier for potential suiters to value Fiat Chrysler properly, boosting the odds for a merger, which the Italian-American automaker has reportedly pursued for a year. The spinoff also frees up the company to focus on its $52 million growth plan, which includes expanding the Alfa Romeo and Jeep brands.
Investors received one Ferrari common share for every 10 Fiat Chrysler common shares held, as Fiat Chrysler unwound its 80% stake in the brand.
The company previously sold another 10% of Ferrari in an initial public offering in October. The remaining 10% is owned by founder Enzo Ferrari’s son Piero Ferrari.