Germany’s most famous luxury car manufacturer made stock market history today.
Key Details
- Porsche marked the second biggest debut on the Frankfurt stock market at 75 billion euros ($72 billion) on Thursday—second only to Deutsche Telekom in 1996.
- Porsche’s historic initial public offering (IPO) has even helped the German automaker outperform the current stock market.
- The company opened 12.5% of its total shares to the public from September 22 to 28 and has reaped the benefits.
- “The maker of the 911 rose as much as 2.9% to €84.88 ($83.13) in Frankfurt, against a decline of as much as 2% in Germany’s leading DAX index. The offer price of €82.50, the top end of VW’s initial range for the shares,” says Bloomberg.
- “The listing, reaping €9.4 billion in proceeds for VW, is Europe’s largest initial public offering in a decade and comes amid some of the most challenging market conditions in years.”
- “Volkswagen has said the market’s volatility was precisely why fund managers were sorely in need of a stable and profitable business like Porsche AG in which to invest,” says Reuters.
Why it’s important
The IPO’s success is important for Porsche, which is aiming to leverage the new capital to help it finance its new plans to move toward electric vehicles.
“Volkswagen priced Porsche AG shares at the top end of the indicated range and raised 19.5 billion euros via the listing to fund the group’s electrification drive,” says Reuters.
As we previously reported, the sale also returns a minor portion of the company back to the Porsche family—returning those members to the supervisory board. The Porsche family will have a 25% share in the company, giving it greater control than it has had in more than a decade and allowing them some strategic decision-making capacities.
“Up until 2009, the family-owned half of Porsche and all voting rights, but they were forced to sell the sports-car business to VW after their attempt to take over German carmaker went awry. The IPO restores family control over an asset that has been long out of reach,” says Bloomberg.
