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Porsche European IPO, One of Largest in History

Tue, Oct 04, 2022

Porsche Porsche european ipo one of largest in history

Porsche spectacularly entered the stock market, the carmaker led a successful IPO this week on the Frankfurt stock exchange.

With $9.1 billion raised, Porsche’s initial public offering is considered the largest in Europe's history. The shares’ price was 85.68 Euros, rising from 82.50 Euros after only one day into the trading operations. Volkswagen, Porsche’s parent company, organized the entire operation; lining up potential investors to buy a minority stake in the German famous sports carmaker. Volkswagen also vowed to put the raised funds into good use, investing them into renewable technology development, in hopes to accelerate the shift toward electric mobility for itself and all its sub-brands.

Putting Porsche on the stock market was an extremely bold move from Volkswagen, considering the current economic situation in the world. However, the investors’ scramble to get a piece of Porsche’s shares is enough proof that VW was right in its calculations. Investors were emboldened by Porsche’s recent strong profit margins, giving them the impression that putting their money into the sports carmaker is a safe investment despite the current monetary environment.

So where are we standing now? Currently, Volkswagen is still the majority shareholder in Porsche, the offered shares represent 25% of the company’s capital, 12.5% of which are sold as non-voting shares, and the remaining 12.5% are voting shares, sold at a 7.5% premium, and are currently held by the Porsche and Piech families, descendants of automotive pioneer Ferdinand Porsche.

The raised 19.5 billion Euros will be divided into two, 49% will be paid as dividends to Volkswagen shareholders. And the remaining 51% will be spent on new investments.

Volkswagen will now have enough legroom to start new important projects such as new factories, technologies, and lines of business that are all oriented towards the development of sustainable mobility.

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