Fiat Stock Slumps to Seven-Year Low on Stock Sale Rumors

Fiat SpA's stock price dropped to €6.85, its lowest since 2007, on Tuesday. Analysts attribute the slump at least in part to erroneous concern that many of the company's shareholders would sell their holdings in opposition to the Fiat-Chrysler merger.

Fiat calls rumors of a selloff "groundless" and reports no shareholders have so far exercised their exit rights.

On Aug. 1 shareholders approved merging Fiat and Chrysler to form Fiat Chrysler Automobiles NV. But 8% voted against the deal. They have until Aug. 20 to cash out their holdings at €7.73 per share rather than convert them into stock in the new company.

Fiat previously budgeted €500 million to cover such payments and said it would suspend the merger if the allocation enough to buy back about 64,700 shares was exceeded.

Analysts point out that shareholders who voted against the merger won't necessarily exercise their cash exit rights.