Volkswagen to Walk the Talk of Listing Porsche AG

Update (September 6)

Germany-based automaker Volkswagen AG (VWAGY) is all geared up to launch the initial public offering (IPO) of iconic sports carmaker Porsche AG in late September or early October. In this regard, the company has informed that Porsche’s stock has been split into 50% ordinary shares and 50% nonvoting preferred stock. Porsche AG will be listed on the Frankfurt Stock Exchange. In the IPO, Volkswagen is offering just 25% of Porsche’s preferred stock to private investors.

Further, Porsche SE, which will purchase 25% plus one additional share of the voting stock in Porsche AG, will pay an IPO price plus a 7.5% premium to buy the shares. Volkswagen aims to pay a special dividend to its shareholders at the beginning of 2023 with 49% of the proceeds raised through the IPO and the private placement.

VWAGY Holds a Meeting to Discuss Porsche AG IPO

Volkswagen AG is set to conduct a meeting on September 5 to finally discuss the plans to list the sports car maker Porsche AG in late September or early October.

Volkswagen is contemplating whether its largest shareholder, Porsche Automobil Holding SE (POAHY), should be given the nod to acquire 25% plus one additional share of the voting stock in Porsche AG.

Notably, Porsche SE is an investment fund that is largely owned by the family of Porsche’s founder. The purchase will allow the Porsche and Piech families to get greater control over the carmaker by giving them a blocking minority.

The listing of Porsche AG is expected to blast off as one of the blockbuster initial public offerings (IPO) in Europe. Experts are expecting that the IPO could value Porsche in the range of 60-85 billion euros (around $59.72-$84.6 billion), according to The Wall Street Journal. Looking at these figures, Porsche AG IPO could raise over 10.6 billion euros ($10.55 billion) if it hits the higher end of the estimated valuation range.

Why Have VWAGY Shares Dropped?

Volkswagen stock has lost about 37.5% so far in the year as the Russia-Ukraine crisis fuelling energy costs has weighed on the company’s performance. According to the TipRanks tool, retail investors seem to be apprehensive about the VWAGY, as they have sold 2.2% of Volkswagen’s stock in the last 30 days.

On the contrary, the financial bloggers are 100% bullish on the Volkswagen stock, in comparison to the sector average of 64%.

Final Thoughts

Through the Porsche AG IPO, Volkswagen intends to finance its plans to keep up with the clean energy trend. Not long ago, the company announced its plans to introduce a fully-electric SUV and a pickup truck in the United States. It also aims to widen its footprint into more revolutionary technologies like self-driving cars. Moreover, Volkswagen has ambitious plans to create a new venture to develop batteries for its EVs.

Read full Disclosure