Not quite true, their share price has been higher in the last 5 years, when they bought up the last remaining stake in Chrysler, however since then their shares have been on the way down. Recently as I explained above, Fiat have fallen significantly behind in the technology stakes and now really really need to find a partner to take them forwards. The reason the share price is going up is because it makes a sensible investment, Fiat shares are not particularly strong and therefore if they merge with anyone they will go up further still as there will be advantages to share holders such as further share options, payouts or bonuses. So buy the shares before the merger and sell them at their peek value.
The danger with the shares carrying too much value is it pushes up the costs of any merger deal and other companies might walk away becaus of it, it’s much more cost effective to merge with a company that is not worth as much and get a deal taking over the brand names for minimal investment.
What you’ll notice is Hyundai shares are not rallying which suggests this plan would not be such a good deal for Hyundai.
It’s all irrelevant anyone, Fiat for the last few months keep setting off rumours over who they will merge with and so far they’ve been shot down by the other rumoured companies, in this case even Hyundai have said they have no plans to merge, when they rumours fiat would merge with VW, a spokesman from VW stated they hadn’t even been approached.
Prices are up it maybe a good time to buy but would be a gamble, if fiat now fail to form a merger with anyone their share price could tumble significantly. If you already have shares, it’s a bad time to sell as you may loose money if you bought them a couple of years ago or recently bought in.
All in all share prices have little to do with the performance of the company sometimes and more to do with what’s going on in the world.
A recent example being the problems in North Korea, causing American share prices to fall, this in tern damaged the share prices in Europe, but because of Brexit and the pound this had little effect on UK shares meaning that the value of the pound went up.
So all in all thanks to the orange Baffoon in the White House, I got about £10 better deal on my holiday money.
Last time I went abroad was the week after the general election, because it again crashed Uk share prices, when the exit pole came out, I bought my currency from a company online before the trading markets opened again and saved myself £80 as the value of the pound plummeted the following morning.
I keep a very close eye on these things these days, Fiat shares ago would be a good deal and I’d be selling them now, but I wouldn’t buy at the moment, as it could co horribly wrong and I’m not into taking that bigger risk.