orsche’s stock price rose on its first day of trading after the sports car maker defied a worsening global economy in its €75 billion (£67 billion) IPO. The last time a listing of this size occurred in Europe was over a decade ago, and it hasn’t happened since.
The shares were first listed for sale on Thursday on the Frankfurt stock exchange at 82.50 euros; but, by late morning, their value had risen to 86.30 euros.
Volkswagen, a German automaker, offered 12.5% of Porsche shares in order to generate the billions of euros needed to spend on electric automobiles. As a sports vehicle manufacturer, Volkswagen wanted to see its stock price rise to the level of Ferrari, an Italian rival that has been able to command a price tag more in line with high-end fashion labels.
Through this deal, we were able to raise 19.5 billion euros, with Volkswagen receiving over half of that sum. Volkswagen has dividends in mind for its shareholders to receive a piece of the company’s income.
The history of both Volkswagen and Porsche can be traced back to the same man: Ferdinand Porsche, who in the 1930s founded a vehicle corporation and went on to design the first “people’s automobile.”
Oliver Blume will continue to serve as CEO of both companies even after they are split up on the stock market. This suggests that there will be little variety in terms of management philosophy or strategy as people make the switch to electrical power.
Ten years after handing over the administration of the firm to Volkswagen, the Porsche-Piech family, the largest shareholder of Volkswagen, will be able to retake control of Porsche as a result of the spinoff.
Managing partner at Vendigital and expert in the automotive industry Dom Tribe had this to say about the IPO: “This IPO will make it possible for the Pich family to reestablish majority ownership in Porsche – a move that probably wouldn’t be doing any other way.
Costing more than £50 billion, it will provide a “significant injection of finance” to help Volkswagen’s goal of becoming the world’s leading EV (electric vehicle) manufacturer by 2024 go forward more quickly.
Blume was quoted as saying, “We made this decision very thoughtfully – there is no time frame in which it will be reevaluated,” while standing next to an electric Porsche Taycan parked outside Borse Frankfurt. Blume also dismissed criticism directed at his roles as chief executive officer of both organizations.