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Opinion
Matt Levine

Levine on Wall Street: Chrysler's Unwanted IPO

Chrysler filed papers for an initial public offering yesterday but made it plain that it didn't want to: Its retiree health-care trust, which owns 41.5 percent of the company, demanded the IPO under its registration rights agreement.

Chrysler would just as soon you don't invest in its IPO

Chrysler filed papers for an initial public offering yesterday but made it plain that it didn't want to: Its retiree health-care trust, which owns 41.5 percent of the company, demanded the IPO under its registration rights agreement. Fiat, which owns the other 58.5 percent, wants to buy the trust's shares and not go public. The trust thinks Fiat's price is too low and is trying to get a higher valuation by selling some shares publicly. The game theory here for potential investors is fascinating -- if you buy Chrysler shares, you're just a plaything in Fiat's game with the trust -- but then there is also the fact that Chrysler's chief executive officer is Sergio Marchionne, who is also Fiat's CEO. As Chrysler's CEO he is tasked with leading a successful IPO. As Fiat's CEO he is tasked with buying Chrysler at the lowest possible price. The IPO filing is full of warnings about conflicts, but none is more eloquent than this quote from the Bloomberg News story: