In one of Europe’s biggest IPOs ever, Porsche shares increased in their market debut on Thursday.
In its debut on the Frankfurt Stock Exchange, Porsche shares increased 2% to 84 euros per share, valuing the company at €77 billion ($75 billion). This bucked Thursday’s general fall in European market indices, including Germany’s DAX.
By 9:30 a.m. London time the Porsche shares steadied at 84.50 euros. Volkswagen’s (parent company of Porsche) sale of 911 million shares is a reference to Porsche’s well-known 911 model.
Nearly forty percent of the available shares had already been grabbed by cornerstone investors before trading opened. Previously the sole owner of Porsche AG, Volkswagen is now selling a 12.5% interest in the sports car maker.
IPO will boost Porsche with nearly 20 billion euros
Volkswagen forecasts that issuing shares will provide Porsche with a 19.5 billion euros cash boost, granting the business additional financial flexibility in respect to electric vehicles.
The historic listing arrives amid a moment of market instability as the auto sector continues to suffer the consequences of the crisis in Ukraine and as the valuations of other luxury carmakers, including Aston Martin, Ferrari, BMW, and Mercedes-Benz, have all decreased over the past few months.
Given that Porsche is a very powerful brand with a unique market position, the IPO is unlikely to serve as a model for other firms. Volkswagen originally announced Porsche’s plans to go public on September 5.
Porsche returns to the public markets for the first time in a decade with this stock offering. The firm was bought by the Volkswagen Group after Porsche’s 2008 bid to acquire the much bigger German carmaker failed, and it has since become the most prominent brand in Volkswagen’s portfolio.
Porsche’s initial public offering (IPO) is also a rare bright light for the once-booming sector of taking firms public, which has suffered from unpredictable markets as investors rush to secure assets like the U.S. dollar. According to Refinitiv, the number of initial public offerings has decreased by 40 percent worldwide during the past year.
