Currently, it is anticipated that Porsche AG will go public in Frankfurt before the end of 2022. The offering may occur as early as late September or early October, with the listing expected to be completed by the end of the year at the latest, according to Volkswagen, the company that now owns Porsche AG. Volkswagen originally disclosed it was considering the listing back in February.
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Given Ferrari’s valuation, the IPO seems alluring. Porsche’s choice to go public is important, but so is raising money and resolving personal matters.
The planned initial public offering (IPO) of luxury automaker Porsche comes as parent company Volkswagen (VWAGY 4.40%) tries to raise money for a $73.3 billion (73 billion euro) transformation into electric and hybrid powertrains in order to surpass Tesla (TSLA 1.89%), the current market leader in EV sales, by 2026.
According to a company statement, VW plans to undertake a Porsche IPO by the first of October, pending changes in the capital markets.
25% of the sports car brand is sold by VW. Voting rights would not apply to 50% of the shares. Members of the Porsche family, whose company, Porsche Automobil Holding (POAHY 4.65%), has 53% of the voting power at VW, will purchase the remaining shares.
Volkswagen will also sell Porsche Automobil Holding a 25% ownership — plus one common share — in Porsche, giving the family greater authority over what was once their pride and joy and a minority with veto power in the manufacturer. It is anticipated that the share sale will bring in between 60 billion and 85 billion euros.
However, this sale is motivated by more than just financial gain; it also aims to resolve a family conflict.
However, industry observers are concerned that it is not the right time to go public with such a well-known European brand because of growing inflation, weak markets, and the European conflict.
Volkswagen has said that it will proceed with the initial public offering of Porsche, one of its most recognizable automobile brands worldwide. The 91-year-old automotive luxury brand is anticipated to have one of the biggest IPOs of any European firm this century, but there may be significant obstacles in the way of its initial public offering. What you need to know is as follows:
- What is going on? Porsche has announced its IPO. Volkswagen AG, the dominant player in the German automobile industry, has formally declared its “intention to float” Porsche.
- Was the Porsche IPO a surprise? Although it’s not shocking, it is a little unexpected. Volkswagen stated in February that it will investigate the viability of going public with Porsche. The business stated on Monday that it will proceed with an IPO.
- So what about it surprises you? The world has altered significantly since Volkswagen first declared in February that it would consider whether to go public with Porsche. The current war in Europe has caused energy prices to soar. In turn, this has simply fueled an inflationary escalation. Some market observers didn’t anticipate Volkswagen to move forward with what might be one of Europe’s largest IPOs at this time because these kinds of events typically cause markets to decline.
- What day will Porsche go public? Volkswagen has not yet provided a precise date. But the business anticipates it happening in the next few weeks. Porsche’s IPO, according to Volkswagen, will take place in late September or early October.
- What will the stock ticker for Porsche be? At this time, that is uncertain.
- Where will Porsche conduct business? No U.S. stock exchanges will list it. Porsche shares will be traded on the German Frankfurt Stock Exchange.
- How much is a Porsche worth? pretty a lot. According to Reuters, the Porsche IPO will value the company at between $60 million and $80 million, potentially making it one of the biggest European initial public offerings (IPOs) since the 1990s.
- Will there be a Porsche IPO? The announcement from Volkswagen seems to support this, although it is qualified by the statement that the Porsche IPO is “subject to additional capital market developments.” Why does that matter? In other words, if the economy worsens significantly more between now and the IPO date, Volkswagen may opt to delay or cancel the offering.
VW’s comments regarding Porsche’s upcoming IPO
In a statement, the Volkswagen Group indicated that its board had resolved “to pursue an initial public offering of the Porsche AG preferred shares with the objective to list them on the regulated market of the Frankfurt Stock Exchange… by the end of September/beginning of October 2022.”
A choice regarding the Porsche IPO, however, will be “dependent to additional capital market developments,” according to Volkswagen.
On February 24, the day Russia started its invasion of Ukraine, the automotive giant gave a formal indication that it intended to move forward with the IPO.
Who is Porsche’s owner?
In 2011, Volkswagen acquired Porsche. Porsche was once considered a division of Volkswagen AG (interestingly, besides being the Porsche parent company, VW also owns Audi, Bugatti, and Lamborghini). In light of this, Volkswagen AG is the entity that owns Porsche.
Can you buy Porsches?
Porsche’s preferred shares will be priced by the luxury automaker between EUR76.50 and EUR82.50 ($76.35 to $82.34) per share, valuing Porsche between EUR70 billion and EUR75 billion ($69.86 to $74.85).
Key cornerstone investors have given the Porsche IPO a lift despite the gloomy stock market. A group of investors known as cornerstone investors agree in advance to purchase a specific number of shares or contribute a specific sum of money to an initial public offering (IPO). The sovereign wealth funds of Qatar, Abu Dhabi, and Norway have expressed interest in the Porsche stock, and mutual fund giant T Rowe Price will purchase preferred shares valued at up to EUR3.68 billion ($3.67 billion).
Arno Antlitz, chief financial officer at Volkswagen, said, “We are now in the home stretch with the IPO plans for Porsche and appreciate the commitment of our cornerstone investors. The Porsche IPO is going as scheduled, according to the CFO of VW.
25% of Porsche stock, which has no voting rights, is available to investors. Before the Porsche IPO, stock brokers will take pre-orders for Porsche shares.
Is Porsche severing ties with VW?
It is a fact. On September 5, Volkswagen (VOW3) announced its intention to spin-off Porsche in an initial public offering (IPO) towards the end of 2022. However, Porsche’s convoluted ownership structure may make the IPO more difficult and prevent Porsche from being fully listed on the stock market.
Based on the outcomes of its evaluation of a potential IPO, which was conducted on February 24, VW has chosen to proceed in this direction.
According to a VW statement, “Volkswagen AG today resolved, with the Supervisory Board’s approval, to pursue an initial public offering of the preferred shares of Dr. Ing. h.c. F. Porsche AG with the target to list them on the Regulated Market of the Frankfurt Stock Exchange (Prime Standard) at the end of September/beginning of October 2022 (“intention to float”) to be completed by the end of the year.
Investors have estimated that Porsche is worth ranging from EUR60 billion ($59 billion) to EUR85 billion. The price of the VOW3 share increased by 5% the day following the announcement.
Who is Porsche’s greatest shareholder?
The valuation of 70–75 billion euros, which was revealed on Sunday, is significantly higher than that of other German automakers like BMW, which is valued at 49 billion euros, and Mercedes-Benz, which is valued at 61 billion. However, it is slightly lower than some investors’ estimates of up to 85 billion euros.
Additionally, it is not far from Volkswagen’s own market value of 88 billion euros. In premarket trading, the automaker’s shares increased by 3%. They were only little higher at 145.6 euros by 09:14 GMT, up from 145.46 at Friday’s closing, but they managed to defy a decline in European shares.
Porsche AG’s Chief Financial Officer Lutz Meschke stated in early September that although the IPO might still be canceled before trading begins on September 29, this would only occur in the event of additional “serious geopolitical difficulties.”
Volkswagen’s shares rose 3% in premarket trade, but by 0838 GMT, they had only increased by 0.4% from Friday’s close. Analysts have predicted that Volkswagen’s own valuation might increase as a result of the listing by showing the value of just one of its luxury brands.
On Sunday evening, Volkswagen said that it will price Porsche AG’s preferred shares at a range of 76.50 to 82.50 euros per share.
The automaker intends to issue preferred shares, which do not have voting rights, to investors for up to 12.5% of Porsche’s share capital.
Cornerstone investors have already claimed about 40% of the available share capital: According to a statement released on Sunday, Norway’s sovereign wealth fund and T. Rowe Price will each buy shares worth 750 million euros, while Qatar Investment Authority, Volkswagen’s third-largest stakeholder, has committed to purchasing 4.99%.
“Investors are lining up, so it looks like the Porsche IPO will be successful. One may envision listing other components [of Volkswagen] like Audi on the public exchange if the Porsche IPO is successful “Data analytics specialist Arndt Ellinghorst of QuantCo remarked.
Porsche AG stock has been contrasted by analysts to Ferrari, which has a 38 billion euro market valuation but an operating margin of 24% as opposed to Porsche’s 17–18%. The German automaker is far ahead in electric vehicles and aims for a 20% margin.
However, given that Porsche AG’s Chief Executive Oliver Blume oversees both the sports car manufacturer and the Volkswagen Group, with Porsche SE holding a sizeable part, some investors have expressed caution due to the complicated governance difficulties at the company.
Shares will be made available to private investors in Germany, Austria, Switzerland, France, Italy, and Spain from September 20 to September 28 during the subscription period for both individual and institutional investors.
In accordance with the deal Volkswagen and Porsche SE reached earlier in September, Porsche SE will receive 25% plus one ordinary share in the sports car manufacturer, which does have voting rights, for the price of the preferred shares plus a 7.5% premium.
VW purchased Porsche when?
In 2011, Volkswagen and Porsche amalgamated. The parent business of numerous other luxury automobile manufacturers, such as Audi, Bentley, Bugatti, and Lamborghini, is the Volkswagen Group.
Hold Porsches’ values steady?
Porsche vehicles retain their value. Compared to other brands, many Porsche models are renowned for maintaining their value well. All automobiles eventually lose value, although Porsches do so generally more slowly. If you purchase a used Porsche vehicle, it won’t have depreciated as much as a comparable non-Porsche vehicle from the same year.
Are Porsches merely Volkswagens?
Actually, the cars are produced by H.c. F. Porsche AG. The majority of people picture that when they think about Porsche. Another corporation using the name Porsche is Porsche Automobil Holding (POAHY). In essence, it is a holding corporation that owns around 53% of Volkswagen’s ordinary shares.
Is buying a Porsche a wise investment?
According to Zacks’ exclusive data, Porsche Automobil Holding SE Unsponsored ADR is presently ranked as a Zacks Rank 4, and over the coming few months, we anticipate a below-average return on the POAHY shares in comparison to the market. Additionally, the VGM Score for Porsche Automobil Holding SE Unsponsored ADR is C. (this is a weighted average of the individual Style Scores which allow you to focus on the stocks that best fit your personal trading style). Porsche Automobil Holding SE Unsponsored ADR may be cheap, according to valuation criteria. It would be a good choice for value investors, according to its Value Score of A. POAHY’s financial stability and expansion possibilities show that it has the potential to outperform the market. It now has a D-grade growth rating. With a Momentum Score of D, recent price fluctuations and earnings estimate revisions suggest this would not be an excellent company for momentum investors.
Why did Volkswagen decide to buy Porsche?
Another justification for Porsche’s purchase of Volkswagen stock was now clear: Porsche believed it was getting a good bargain and that the company was inexpensive.