The Deal: Chrysler Test Drives Its IPO
But there are risks for VEBA as well. The trust is limited in the number of shares it can sell to the public, and the small float, coupled with Fiat's dominance over Chrysler's operations, could limit the appeal of the shares on the open market. Going through with the offering could risk fracturing the close working relationship between Fiat and Chrysler, which could frighten would-be investors.
Chrysler is also seen as overly-reliant on North America and lacking a presence in emerging markets, and could be more vulnerable than its rivals to a slowdown in the U.S.
Should demand from the public be tepid, the offering would serve to reinforce Fiat's view on Chrysler's valuation and make it more difficult for VEBA to demand a higher price for its remaining shares.
--Written by Lou Whiteman
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