As stock markets opened on Monday, Jan 18, Stellantis Chairman John Elkann rang the opening bell for Milan and Paris exchanges. In a prerecorded video, he said, “Stellantis represents an extraordinary opportunity in this challenging era, but yet a very exciting one of profound change for our industry. Our ambition is to build something unique, something great by providing our customers with convenient, safe, sustainable and affordable mobility services… The focus from day one will be on the value creation that is the result of the implementation of those synergies and the execution of those synergies is going to increase sharply the competitiveness of this company vis-à-vis its peers.”
With that, trading opened with Stellantis positioned overnight as the fourth-largest carmaker in the world. On Jan 19, CEO Carlos Tavares and John Elkann opened trading on the New York Stock Exchange (NYSE) by virtually ringing the bell.
Trading under the Stellantis ticker (STLA) signals the completion of their merger. The governance structure takes effect with nine additional appointments as non-executive directors, an Audit Committee, a Renumeration Committee, and a Governance and Sustainability Committee kicking off.
How did Stellantis do on its first day?
Shares for STLA opened at €12.758 per share, or $15.49USD and by afternoon had climbed on both the Paris and Milan markets to $16.23 and $16.32 respectively. Positive results on Monday are a great sign that investors approve of the deal that reportedly saves the carmakers a combined $5.9 billion in costs annually. Markets opened Tuesday in Milan with another boost, spiking to $17.30USD in midday trading.
As trading began on the New York Stock Exchange Tuesday, it opened at $17.17USD and began a slight decline rather than an immediate climb. Although it’s early days for the company, the difference in trading could highlight perspective variances between the American and European markets.
Stellantis also succeeded in communicating their forward-looking plans. As both FCA and PSA group were somewhat handcuffed to develop new tech and models going forward, the merger allows for easy collaboration between brands to stay competitive in their markets.
CEO John Tavares, known to be a masterful shot–caller when faced with hard decisions, already positioned the company to bolster profits by indicating that under-performing brands and models will be under scrutiny and chopped if necessary. At this point, it’s unclear which of the 14 brands could be facing the butcher’s block, although Chrysler would be a probable option.
Where is Stellantis going from here?
According to analysts, 12-month median projections for Stellantis see the stock price growing modestly to $17.23. However, the uncertainty in the economy as well as some fluidity in the merger has a few outliers on the target. Estimates have come in as high as $21.16 for the year while others have a less rosy outlook, forecasting a slide to $10.70 per share in the next 12 months.
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