The success was expected, it was there for the manufacturer of (luxury) sports cars Porsche on the finish line of its IPO on the German Stock Exchange on Thursday. In the very first quotations, the action of the Volkswagen subsidiary rose by nearly 2%, to 84 euros.
The latest information circulating on the market left little doubt. In the gray market, the period when institutional investors adjust the placement before listing, Porsche was trading almost 20% above the indicative price range of 76.50 to 82, 50 euros per share, valuing the manufacturer at more than 75 billion euros (based on 82.50 euros per share), which is much more than the French companies Stellantis and Renault combined. It is this high end of the range of 82.50 euros that was chosen as the final price of the IPO, a level at which the action stabilized at the start of the morning, in a market once again in sharp decline, in particular car manufacturers.
By placing only 12.5% of the total capital of its subsidiary on the market, Volkswagen has opted for scarcity. One way to succeed in this IPO in a difficult period: what is rare is expensive. Especially since several major investors (the Qatari, Abu Dhabi and Norwegian sovereign wealth funds, in particular) had undertaken to acquire nearly 40% of the securities offered. Some analysts also valued the sports car brand at 90 billion or more. Which would place Porsche, for example, sixth in market capitalization on the Paris Stock Exchange, behind LVMH, L’Oréal, Hermès, Totalenergies and Sanofi.
“911”, the symbol
In detail, it is a quarter of the preferred shares that have been offered to investors. The capital, remember, was divided into 911 million shares (a nod to the iconic model of the German manufacturer – the first generation was marketed in 1964, entirely designed by the Stuttgart firm). It is divided, on the one hand, into 50% of ordinary shares with voting rights which will be held three-quarters by Volkswagen and, for one-quarter, by the family holding company Porsche ASHE (also Volkswagen’s largest shareholder). On the other hand, 50% preference shares without voting rights.
Based on a valuation of Porsche at 75 billion euros, the 75% stake that Volkswagen keeps represented 56 billion, or 60% of its market capitalization. Successful operation, therefore, for the inventor of the “people’s car”. It’s up to the manufacturer, now, to put the Lamborghini car brand or Ducati motorcycle brand, which he owns, on the stock exchange, to repeat the feat.