An this Thursday, the Frankfurt Stock Exchange experienced the second largest IPO in its history after Telekom in 1996. At that time, the state sold shares in the company. This time it is Volkswagen AG that is selling shares. 113.9 million shares of preferred stock. Investor interest was huge, so that the price range from EUR 76.50 to EUR 82.50 could be fully exploited and the shares were allocated at EUR 82.50, as the VW Group announced on Wednesday evening. In this way, the VW group will receive 9.4 billion euros. At Telekom in 1996 it was a good 10 billion euros.
But VW not only takes the money from the placement of the non-voting Porsche preferred shares, which will be tradable in Frankfurt from this Thursday under the securities identification number PAG911. At the same time, the Porsche and Piech families, through their Porsche Automobil Holding, are buying 25 percent plus one share of the ordinary shares, which will not be freely tradable. They pay 7.5 percent more for this than preferred shareholders, in other words a total of 10.1 billion euros. A total of 19.5 billion euros will flow to the VW Group, almost half of which is expected to be distributed to VW shareholders in January. This corresponds to around 19 euros per share and thus a dividend yield of a good 13 percent for VW preferred shares and 10 percent for common shares. The Porsche and Piech families will thus receive a good 3 billion euros before taxes, and the state of Lower Saxony and the major shareholder Qatar will each receive a good 1 billion euros.
According to the first pre-market prices, the Porsche shares should start trading with a decent price premium. However, that doesn’t mean much for future share price development. Some IPOs were canceled at the last minute despite allegedly lively investor interest, most recently the Mein Auto Group last year in May.
euphoria evaporates
Others have been greeted with euphoria on the market. Car1 for example. The used car dealer from Berlin with a digital business model raised almost 2 billion euros from investors in February 2021, issued in shares at 38 euros each, first price: 55 euros. Such a jump in prices is a rarity in Germany. Deutsche Börse soon included the share in the M-Dax with an initial market value of 11 billion euros. But the general enthusiasm didn’t last long. In fact, it was very short. A few weeks after the IPO, 50 euros were paid for a share for the last time. The issue price of 38 euros was undercut for the first time shortly before the M-Dax inclusion. When the stock exchange announced in March 2022 that it would downgrade the share to the S-Dax, it was only 11 euros. On Thursday it was 7.30 euros – 80 percent less than the issue price, 87 percent less than the first course, in absolute figures minus 9.5 billion euros.