The Piaggio IPO: A timeline

for those of you who (like us) have the business sense
of a six-year-old running a lemonade stand:

1999: The Agnelli Family (best known for running Fiat into the ground) sells Piaggio, with whom they also worked their magic, to Morgan Grenfell Private Equity (part of DeutscheBank). Morgan Grenfell brings Vespa back to America and loses even more money.

October 2003: Morgan Grenfell sells a chunk of Piaggio, near-bankruptcy, to Immsi, an investment company run by Roberto Colaninno, an extremely rich and powerful Italian businessman famous for paying €60 billion for Telecom Italia. He pays €100 millions for about a third of Piaggio and permission to have his way with her. Colaninno brings in Rocco Sabelli as CEO and they start turning things around, kinda like Michael Keaton and Gedde Watanabe in “Gung Ho.”

2004: Piaggio acquires Moto Guzzi and Aprilia and adds them to its lineup, already including Derbi, Piaggio, and Vespa, as well as Ape and Porter commercial vehicles. Sales improve, new markets are explored, cooperation with other companies is announced, and things look good. Other than in America, of course.

Jan/Feb 2006: Piaggio announces it is preparing to go public, which in short means that shares of the company will be sold on the stock market to individual investors to raise operating capital. Thus, anyone with enough money to buy shares, would then have a small stake in the profits and operations of the company.

March 11, 2006: Piaggio CEO Rocco Sabelli announced that Piaggio would go public by the end of the summer, to be listed on the Borsa Italiana, Italy’s main stock exchange, based in Milan.

May 2006: Piaggio goes into overdrive, making a big fuss about the Vespa’s 60th anniversary, and revealing the MP3 three-wheeler and prototype hybrid Vespa and Piaggio scooters. The timing is not a coincidence.

June 2006: Piaggio announces their first profitable first-quarter in recent memory, lightning strikes the factory, and despite early-June rumors that the IPO may be delayed, Piaggio announces their prospectus (the document outlining the plan to go public) is about to be approved by Consob, the Borsa Italiana regulatory board.

June 19, 2006: the prospectus is released. Immsi, who now owns 40% of Vespa announces they plan to acquire an additional 9%. With the prospectus in hand, the company’s various owners (Morgan Grenfell now owns 20%, they and other part-owners and creditors will sell their shares) plan to sell 158 million shares to mostly institutional investors (funds, banks, etc) for between €2.30 and €3 a share, and hopes to generate up to €474 million with the sale.

June 20, 2006: Piaggio’s agents begin to meet with institutional investors and the IPO is underway.

July 4, 2006: Despite Pirelli’s IPO cancellation due to lack of interest, Piaggio announces they’ll continue to move forward as planned. Colaninno reveals he’s never ridden a motorcycle.

July 6, 2006: It is announced that the IPO sold 119.3 million shares shares, valued at €2.30, the low end of the projected range. At this point, no shares have been sold on the open market, only privately to the institutional investors who will then hopefully unload them for profit when the stock is traded on the Borsa. This scored Piaggio nearly €300 million in cash and set their worth at just under €900 million. Had the shares had traded at the high end, €3 per, Piaggio would have been worth over €1 billion. Immsi, who increased their share to 49%, buys even more shares to increase their stake to 56%. Sabelli and other executives are permitted to sell half their stock-option shares.

July 11, 2006: Shares are traded on the Borsa Italiana for the first time. More than 21 million shares are traded by the institutional investors that bought them in the IPO. The stock opens at €2.50, and the Borsa temporarily freezes trading when the price hits €2.62. That’s a healthy profit (up to 14% if you’re counting) for the investors that funded the IPO. It eventually closes at €2.46.

13 thoughts on “The Piaggio IPO: A timeline”

  1. It should be obvious to any astute potential investor, that all Colininno did was add a LOT of window dressing , and performed a wonderful smoke and mirrors show. Piaggio USA contends that sales are up, but this has yet to be proven at the retail level. As allowed by Creative Accounting Proceedures (CRAP), current profits and sales figures can be stated today based on future sales and profit assumptions. That’s the name of the game. When Piaggio USA talks about sales, they’re talking about SALES TO THE DEALERS, who are continuously having product shoved up their wazzus through inequitable AOP plans, and the continuous opening of new dealers, regardless of their current, or past affiliations. They;re only interested in Sell-To, not Sell-Through. However, a lot of dealers are saying NO to these rediculous stock manipulation attempts, and you can expect to see reality setting in as Piaggio is forced to report REAL numbers, and statistics based on actual operating conditions. Up till now, they’ve been re-arranging the deck chairs on the Titanic, and they’ll soon reap what they’ve sewn. One sucker’s opinion!

  2. Did you miss the part where they made €300 million in a week or two? They don’t care about being exposed as frauds, they have €300 million! That’s how IPOs work. Plus, now they have air conditioning!

    You know, it’s funny, I’ve owned six Vespas over the last ten years, and never owned any other brand of scooter. Yet, I’ve rarely set foot in, and never spent a single dime in, a Vespa boutique or dealer. Considering that fewer and fewer parts sold at “vintage” scooter shops are OEM Vespa, they’ve made very little money off me over the eleven years I’ve been scootering. I think the modern Vespa lineup is allright, but I’d probably never buy one, I’d be more likely to buy a Piaggio than a Vespa, I like “Vintage” and “Modern,” but I don’t dig “Retro.” Yet I spend a couple hours a day on this site, which despite being pan-scooter, is rooted in my love of the Vespa. I spend dozens of hours quarterly doing American Scooterist. So i guess the point is, “What’s wrong with me?” But seriously, people say vintage scooterists aren’t Vespa’s target market. Well, why the hell not? I count myself among America’s biggest Vespa advocates, yet since their return, they’ve completely failed to excite me enough to give them any money, even to buy a sweatshirt or keychain. Yet I’ve spent thousands of bucks on toy scooters and other scooter t-shirts and scooter accessories. That’s really pretty freaking lame, if they can’t even turn *me* on. I’m a fairly affluent guy, I could buy a new scooter if I wanted, i’ve thought about it. Come on Vespa, sell me a damn scooter! Get me excited!

  3. the best part is the closing price of 2.46. Collectable right out of the box!

  4. Well, most sellers the first day are the institutional buyers who paid 2.30 for it in the IPO, so they still made out OK. But that’s funny that the way all the stories I read were worded, i didn’t notice it closed lower than it opened, ha!

  5. But let’s be honest about something. For a lot of vintage vespa owners, the only way they’d buy a new vespa is if piaggio went and released a perfect replica of a GS only with totally new parts. They want a geared scooter and they want a two stroke engine. Well, can’t get a two stroke engine in the US anymore and most new buyers of scooters don’t want (or are falsely intimidated by) a geared scooter. Heck, they even brought the PX150 over and it wasn’t like they were flying out of dealerships.

  6. Matthew, I agree, we’ll never be happy. But like i said, I like modern too. I like a lot about the new Vespas and Piaggios. I’m just saying, if people that ride scooters every day (and I’m not one, I admit I ride very little these days, partially because i’m frustrated with vintage bikes) but people that ride scooters and have for a long time, why aren’t those people interested in new Vespas? Part of it is that they’re flat-out overpriced, yes, they’re better than most other scooters and worth a premium, but some models are nearly twice as expensive as a reasonably similar model from another manufacturer.

    If the PX150 had come out upon Vespa’s return to America, even for $5K, they would have sold plenty of them. Lots and lots of vintage scooterists AND new scooterists would have jumped at the chance to own a brand new PX, even at that cost. The fact is, they spent five years alienating vintage scooterists, allowed the Bajaj Chetak and Genuine Stella to come to market, made a big deal publicly about how dated they were, then, comically, six months later, announced the PXes were coming, brought over a couple thousand, if that, and then discontinued the model internationally a couple months later. They did sell well, Most dealers had orders exceeding their first shipment. In a world without Stella and Bajaj, the PX WOULD have sold, when they brought it in, it was far too little, far too late.

    As far as the 2-stroke engine, that was five or six years they wasted when they could have been selling a bike they already had in production. Also, I just learned the other day that they’d developed prototypes for a 4-stroke P-series for a few years, but decided not to produce it. Now NO ONE is making a metal-bodied, geared scooter, surely there’s enough demand for ONE on the market.

  7. Well, technically there is still the Honda Eterno. Maybe we should all start riding them?

  8. You guys are missing a huge point. The US is a TEENY TINY part of the world scooter market. Piaggio doesn’t bring the newest and neatest stuff here because it isn’t worth doing. Sure, there will eventually be more sold and ridden here. But the reality is that these guys are marketing to European and Asian markets with Europe being the main focus. As for vintage, That’s the same as the vintage car market. You aren’t going to find parts made by the original manufacturer for every vintage car out there, why on earth would you expect to find vintage parts for something that has a far smaller market!? You have to remember that it’s all about Money, and if this market doesn’t support it, the won’t make it! It’s also very important to understand that in Europe, the trend is towards Maxi-scoots – automatic, four stroke! The Euro-3 and 4 standards have two-strokes that comply, but the compliance takes most of the oomph out of the engines. Four stroke and automatic sell, so that’s what they manufacture.

    I know I am coming to this discussion late in the game, but it’s a reality that we all need to acknowledge.

    My .02

  9. Addendum to my last – Piaggio is currently trading over 3 Euro……

  10. jridg, you say “The US is a TEENY TINY part of the world scooter market.” True, and there are many reasons for that, but a very big one is that obstinate, backward Piaggio has blown opportunity after opportunity, since the fifties, to gain a foothold here, because they’ve never put any thought into what it would take to succeed here. That would be no big deal if they were selling product here in a niche market (scooterists), but they’ve purposefully alienated their loyal market in favor of the big time, and thrown away millions of dollars in the process.

    As far as parts, the truth is it’s far easier to find vintage Vespa parts than spare parts for many new scooters. My points have nothing to do with four or two stroke, vintage or modern, my point is Piaggio has botched every chance it’s been given in America, and only survived the eighties and nineties in Europe on tradition, inertia, private ownership and government intervention. They’ve never had to answer to stockholders before, and it’s a good thing, because it wouldn’t have been pretty.

    Colannino (may i point out again that the dude has NEVER RIDDEN A MOTORCYCLE) has said time after time that north america is thier #1 priority growth market, yet they are floundering here, with insane staff turnover, backward ideas, reactionary tactics, and no plan. If they’re building the future of their company on the american market, as they continue to insist, why are we getting watered-down versions of bikes that have been out in europe for months (if we *ever* get them). The new Gileras are all perfectly suited for the US market (and maxiscooters are far more popular, as a percentage of scooter sales, in the US and Japan than they are in Europe), yet Gilera products aren’t even sold here. If they’re concerned about having too many brands going on in america (reasonably,) why not brand the Fuoco, GP, and Runner as Piaggios? Better yet, ditch the Piaggio name in the US and call them all Vespas! Who in America knows who Piaggio is, but Vespa is a household word, even here. Vintage snobs would freak, but they clearly don’t care about that, and it would be a good strategy in the long run. Why market six brands when you can build on the one name everyone knows? These are all questions that should have been worked out in 1996 (granted, that was pre-Gilera/Guzzi/Derbi, but you know what I mean.)

    To summarize, Piaggio built their IPO on a promise of success in North America, and has shown very little promise here, recently or historically. That could change, but it would require a change in the corporate attitude of Piaggio, and that change is very unlikely, given their history and organization.

    See also: Vespa World Club. A team of several executives has been assigned to this project for nine months and there’s been absolutely no progress, other than a superficial website that does nothing but frustrate anyone interested in joining the Club. And the fact is, 9/10ths of the groundwork was already done for them by the FIV.

  11. Unfortunately, and I speak from 1st hand experience, that 60% increase in US sales is being calculated on sell in to the dealers through a shove it down your throat annual order program and an explosition of new dealers (if you have a pulse and can qualify for a line of credit you too can become a dealer). Believe me, if that 60% were being calculated on a 60% increase in retail sales you’d be seeing Vespa dealers doing cartwheels down the middle of Main St.
    It will be interesting to see what happens when the handful of people poised for a big payday get their money and run. That’s when the hens will come home to roost for Piaggio (once again!)

  12. Yes, I’ve heard that from at least four dealers… they’re not counting bikes sold, they’re counting the (and these aren’t the actual numbers, but for instance) three BV200s and two Fly150s they’re making a dealer buy in order to get the two GT250s they’ve already taken a deposit on. Certain bikes are doing well, so they’re tacking the lower-sellers on with the orders.

    And I can name four cities where Vespa left a dealer with a showroom full of bikes in the dust to set up a new dealership full of bikes, that tactic doesn’t hurt ‘sales’ much either.

Comments are closed.