Surely weakness in European vehicle sales didn't catch that many by surprise. Instead it seemed Europe's economy circling the drain became the catalyst for a knee jerk reaction for many to liquidate shares in Ford with total disregard of value.
Apparently some investors didn't notice that the perspective shift in places like Greece, Spain and soon France, based on their last election. Of course, the selloff could be as much a market signal to Ford to "get it together" in Europe. An unlikely message, considering Ford CEO Alan Mulally ranks as one of my top 10 CEOs in the world. Ford under Mulally's leadership destroyed GM (GM) and Chrysler, while positioning Ford as the last man standing during the auto crisis.
Ford is bigger than GM. GM has long been considered the bigger of the two companies. From a company valuation point of view, Ford is the bigger company with a market cap of $36.6 billion vs. GM's valuation of $30.8 billion. Granted, GM sells more vehicles and has greater revenue; however, Ford makes more money. In my book, the company that makes the most money is the biggest company. Even without using earnings as the benchmark, market cap is still more important than the number of sales.
Compare with FacebookEntirely too much investor attention was paid to the recent IPOs of Zynga (ZNGA) and subsequently Facebook (FB). Zynga has a crucial relationship (closer to dependence) with Facebook and has publicly traded much longer, making them an important bellwether for the social networking giant. I have written about Zynga before (see my articles
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