Porsche stakes increase in landmark Frankfurt trading debut

September 30, 2022: -On Thursday, Porsche shares increased in their stock market debut in one of Europe’s numerous extensive public offerings.

On Thursday, the shares of the iconic sports car brand originally traded at 84 euros ($81) after they had been priced at the top end of their range late Wednesday, at 82.50 euros. It values the enterprise at roughly 75 billion euros.

By Thursday morning, shares had steadied at 84.50 euros. Parent company Volkswagen is showing 911 million shares, referencing Porsche’s famous 911 model.

“Today is a big day for Porsche and a great day for Volkswagen,” Arno Antlitz, Volkswagen’s chief financial officer, stated.

The organization knew the IPO would be successful, according to Antlitz, which cited “strong financials” and “a compelling strategy for the future.”

“We were convinced despite the challenging environment, this IPO would prove successful, and we were right,” he said

Before trading started, reactions were positive, with cornerstone investors having already claimed around 40% of the shares on offer, according to Reuters. The sole owner of Porsche AG, Volkswagen, is reducing its stake in the sports car firm, with a 12.5% slice being listed.

According to Volkswagen, listing shares should give Porsche a financial boost of 19.5 billion euros, giving the company more financial flexibility in terms of electric vehicles.

The landmark listing comes at a time of market choppiness as the auto industry continues to feel the effects of the war in Ukraine, and valuations of other luxury carmakers, including Aston Martin, Ferrari, BMW, and Mercedes-Benz, have all dropped in recent months.

“The Porsche AG has decoupled itself from the negative market trends,” one investor told Reuters. Companies are thought to be delaying going public because of current market conditions.

The IPO isn’t set to be a trailblazer for other companies to follow suit, however, as Porsche remains a solid brand with a unique market position. Volkswagen initially announced its plans for Porsche to go public on September 5.

Antlitz also addressed the ongoing semiconductor shortages, which will continue to be an issue this year.

“We expect a better supply in 2023, but we expect an easing of the shortage to kick in in 2024,” Antlitz stated.