Investigation into the how and why of the Ferrari affair.

[z2252314]

See http://www.atlasf1.com/news/2002/ma...p/id/7232/.html for more details).

Copyrighted material removed from post I'm sorry to have to have done this, but Suzy is entirely correct. We must honor the Copyrights of other Websites. Z, if you would like to SUMMARIZE to article, we wold apprciate it.

[z2252314]

This was taken from AtlasF1.com, written by the chief editor Bira. He attends each race meet and this is his version of the Austria debacle. It is a culmination of information from himself and other colleagues. As he says, make of it what you will.

[Jukebox]

Great stuff z2252314

[calais]

if i were a prospective shareholder, i would be more concerned about the future direction of ferrari once TFG and co. depart in a few years, rather than placing any emphasis on them having a manipulated title of "world champions"

[Glen]

That is very interesting reading, and FAR more insightful than 99% of the shouting and wailing that has been going on.

I urge anyone who can spare the time to read it - it won't take any longer than any one of the dozens of threads going round that all say the same thing.

Interesting points...

Since Michael knew all along that he would granted the win, he was told not to race. He could have applied pressure all the way through, but he didn't. Thus Rubens' posistion at the front was not exactly given to him (he deserved it) but was at least made easier.

Also - the flotation of the company means that the WDC needs settling soon. This explains the strange timing of implementing orders on race six.

And - supposedly his contract not only specifies that he must help the driver with the the best chance of WDC, but also that if he happednned to be that WDC challenger Schumacher would be required to help him.

Good stuff, which makes sense to me.

[Jukebox]

Yeah..although it looked as though TGF is a 'yes man' for Ferrari and had no principles but one had to think back of what he's being paid for.

[Maxmil]

. . . . of corporate intrigue! It's an interesting possibility, but I'm not sure I really believe some of the details. It is interesting to ponder what would happen to Ferrari's IPO if Michael Schumacher were to meet with a serious accident now after amassing all these points. If half of that story is true, Ferrari should be suspended for the rest of the season. What a fraud on the fans and the stock purchasers. Cheating in F1 to save Fiat! This deserves investigation.

[calais]

very nice of them to ruin the image of F1 just to maximise their future stock price!!!!

[Suzy]

By the way, Bira is a SHE! (BTW, I'm not sure she'll take too kindly to other people reproducing her work on another site without even crediting it to her).

[Super Tourer]

Just like to add a stockmarket perspective - my 'qualification's' for doing this is that I am a share trader on the London Stock Exchange!

Generally speaking stock markets around the world are not in the bouyant shape they used to be. London is currently stuck in a trading range that it cannot break out of - for example.

This makes IPO's (initial public offering's) or floatations much more difficult to get off the ground. In London, only this week two IPO's have been cancelled due to HMV's (the record shop chain) disasterous float last week.

As a race fan I don't like to see race results blatantly manipulated, but if the above article is correct and Ferrari's ulteria motive is to seal the titles asap to aid their IPO I can see a 'business' reason for hastening the title.

To briefly explain how a floatation happens. Ferrari would appoint a raft of bankers and brokers, basically they have to 'sell in' the float to the major merchant banks to ensure they back it, as it is essential the the issue is oversubscribed by at least 3 or 4 times. Between them they arrive at a floatation share price, which must be carefully chosen,as it needs to pitched so that it immediately rises on trading. When the share is floated, it will initially be traded under conditional terms, which mean's only financial institutions can trade the share. This period essentially breaks or makes the float, if the price doesn't rise at all or even modestly - the float is not a success and the share has to find its own value - alot of which will depend on the performance of the company. After a brief period of conditional trading the share is open to public investors.

FIAT is certainly under substantial financial strain - losing around £300M last qtr and facing falling sales volumes.

I doubt that Ferrari would have difficulty filling an IPO several times over, but anything else than can add to the 'excitment' of the float (ie recently winning the world title) would go towards making the offer more of a success.

[Nicholas]

It also states that, in the event that Rubens is required to give up a win, he will be compensated with a win in return later in the season or, if circumstances don't offer that opportunity, he will be financially compensated by the end of the year.

Well, fair enough. What I don't like is that it makes a boring race in the championship. I'll be interested to see what the FIA can or won't do...

[koby]

That's all pretty logical - and I am of a general belief that there is never smoke without fire, people don't do things like prepare new contracts just for the fun of doing it, - looking how all the principals of Ferrari have to a man played this incident with a straight bat - nobody wavering - makes me believe that they had already worked out the scenario's based on the IPO. This was a corporate decision for Ferrari and not a sporting one - which actually makes me feel even worse about the situation. The only thing that Ferrari probably totally underestimated is the general public reaction - but since 99.9% of them won't be buying any shares - I guess they don't care too much.

[Liz]

Well, this makes the class action suit for race-fixing a lot more probable, then, doesn't it? Because the way I read it, that appears to be exactly what they did.

I'm not a lawyer, but I have worked for lawyers, and I've worked in corporate securities law and international finance law, and this does not look promising. And if I am those drivers, who are the tiniest cogs AND THE MOST VISIBLE ONES in this juggaurnaut, there are little red lights flashing on my steering wheel right now ...

[Super Tourer]

There have been rumoured moves afoot by some of the big bookmakers to take legal action against Ferrari for 'match - fixing'. Interestingly in other sports, several high profile names have been found guilty of this and severly punished. International Cricket for example.

Ironically, I think any outside legal moves, would see the FIA do a u-turn and defend Ferrari/F1. The last thing they would want is for legal action to worm its way into F1 races , once you get legal writs flying around relating to events in a race, its a small step to turn everything into a potential legal issue. ie. Sato suing Heidfield for injury's sustained in his crash. Or a spectator suing a team if a stone hits them in the face or whatever.

In its current state. IMHO the last thing F1 needs is bus loads of grey suits with ribbon bound papers, turning up at every GP.

[Gt_R]

z2252314, thanks for reproducing what is a great insight. As Glen said it, it is definitely a more rewarding read which we deserve than many of the pointless waillings...

Not really very much into stock markets and such, i always thought it strange why Ferrari chose to announce their floatation immediately after such a big mess. This article really string things up by nicely tying up all the odd ends and question marks i had before.

Its very much a corporate decision, and i think if this article hold true, then Ferrari really had little choice. Thanks Bira. Ferrari had convinced yet another of its supporter.

[Gt_R]

But meanwhile,true Ferrari or Michael fans need not feel upset nor confused. Now that it has been almost a week after the debacle, not only do things start to calm, but there is also an increase in support for Ferrari/Michael. Which is a good trend, because it shows that more sensible people are starting to see two sides of a story and understand Ferrari's decisions and Michael's actions.

Scheckter:"Formula One is a team sport...Yes, I feel sorry for Rubens, but I am sure the same thing would have applied to Michael if Rubens had won most of the races so far."

Irvine:“He was honest enough to say he did not want to win this way but the team had given him no choice. I can understand his feelings because he is a straight guy like that."

[z2252314]

By the way, Bira is a SHE! (BTW, I'm not sure she'll take too kindly to other people reproducing her work on another site without even crediting it to her).

She posted this on the public forum. By the way, I thought I did give credit to her. The fact that I mistook her as a he is a mere triviality.

[Piquet]

Well, that certainly gives a very interesting perspective on the whole thing. Although we will probably never know if it is completely true it does provide us with some answers. However, I do not think it is a valid excuse for Ferrari's behaviour and if anything, makes the whole thing stink even more.

[Liz]

The usefulness of a classical education. Ponder this:

""To the Greeks, hubris meant that someone who possessed considerable gifts presumed that, because he had those gifts, he could take advantage of other people. It's a kind of arrogance," says Dr. David Sweet, who teaches the Greek and Latin classics at the University of Dallas.
And, says Dr. Dan Garrison, professor of classics at Northwestern University, "If you're rich and powerful, human nature being what it is, you're likely sooner or later to commit an act of hubris.
"And one of the ways the gods can punish you for this hubris is to give you so much of it that you're in a state of Ate [pronounced AHtay], a state of blindness or delusion. In that state of delusion you'll commit further acts of hubris.
"It's sort of like robbing banks. You rob one and get away with it, so you decide to rob another. And you get away with that one, so you rob another. It becomes a Bonnie-and-Clyde kind of thing."
"To the Greeks," says Dr Deborah Modrak, who teaches ancient Greek philosophy at the University of Rochester, "to be guilty of hubris means going over the top in a way that oversteps moral bounds. It's not hubris to possess great power; hubris is using it in unacceptable ways. It's the inappropriate use of wealth and power. It has the connotation of being out of bounds."
In other words, a person who's guilty of hubris has gotten too big for his britches in a cosmic way.
And Ate--a less familiar idea to us moderns--is what happens to a person who's guilty of the Bonnie-and-Clyde, you-can't-catch-me kind of hubris.
In ancient Greek poetry and drama, Ate is the goddess of foolish or ruinous impulse. When a powerful person is loaded to the gills with hubris, Ate blinds his judgment. His bad judgment then leads him to an action that brings about his downfall.
"A person afflicted with Ate," says Dr. Sweet, "makes remarkable errors of judgment which people think would be uncharacteristic of an intelligent person."

=====================

What do you think? Does it sound like anybody we know?

[Valve Bounce]

It is my understanding that, in most countries, it is a serious offence to manipulate the Stock Market. Doesn't this appear that Ferrari is manipulating the market through fraudulent race fixing?

Valve[img]http://www.**************************/smilies/bouncy.gif[/img]

[Gt_R]

For more information regarding Ferrari's floatation....

Fiat pins hope on magic of Modena.Fiat pins hope on magic of Modena.

[z2252314]

It is my understanding that, in most countries, it is a serious offence to manipulate the Stock Market. Doesn't this appear that Ferrari is manipulating the market through fraudulent race fixing?

Ferrari hasnt even listed yet. All they are trying to do is promote their float by winning both championships. I think your confused with Insider trading, which is an entirely different matter.

[calais]

tell me, once the tobbaco money is outlawed, will the team's worth still be te same????
there is no way they are going to get the same sort of money from sponsors as they are getting now, and that goes for all teams.
plus i think they are pre-empting the fact that once more manufacturers come in like toyota, who dont kmow what the word budget means, they will lose their dominance both in performance and political power.
its like offloading a company when it is at its peak, knowing that the future does not look good

[Jukebox]

Not all teams in F1 have tobacco companies as their main sponsor at moment. The most significant to be in deep $hit would be BAR.

[z2252314]

its like offloading a company when it is at its peak, knowing that the future does not look good

Completely agree. I would be careful investing in Ferrari. Surely it can only go down from here. Wait a couple of years until Schui, brawn, byrne etc call it quits and my guess is that Ferrari will return to the same sorry state of the 80's and early 90's.