Business
Porsche Shares Rise On First Trade Day In €75bn Float
(CTN News) _ Porsche shares rose on the first day of trading after the sports carmaker floated on the stock market for the first time in more than a decade, shrugging off a worsening economy.
The Frankfurt stock exchange issued the shares at €82.50 on Thursday, then they rose to €86.30 by late morning.
In order to raise billions of euros for electric cars, Volkswagen listed 12.5% of Porsche’s shares.
They also hoped the sports car company would be able to match Ferrari, which has been able to attract a valuation more typical of luxury fashion companies.
Volkswagen will get about half of the $19.5bn raised. Part of the proceeds will go to dividends.
Volkswagen and Porsche have been intertwined since Ferdinand Porsche founded a car company in the 1930s, before creating the original “people’s car”.
The companies will be listed separately, but they will retain the same chief executive, Oliver Blume, suggesting little change in management style or strategy.
Spinouts allow Porsche-Pich, Volkswagen’s biggest shareholder, to regain control of Porsche a decade after Volkswagen ceded it.
“It’s a move that probably wouldn’t be feasible any other way,” said Dom Tribe, a partner at Vendigital and an expert in the automotive sector.
Moreover, it will accelerate VW’s ambitious plan to overtake Tesla as the world’s leading EV [electric vehicle] manufacturer by 2024, which could cost the company over £50 billion.
Reuters reported Blume was happy with the opening price. Also, he defended his roles as CEO of both companies.
“We made this decision very consciously – there’s no time horizon for reevaluating it,” Blume said, standing outside Börse Frankfurt next to an electric Porsche Taycan.
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