Porsche had its Initial Public Offering (IPO) on the German Stock Exchange late last month. Using the words Porsche and IPO meant it was a very popular news and the IPO saw an overwhelming response from the investors which lead it to becoming one of Europe’s biggest ever. It has given a much required push to the German Automaker. Now though, on the 6th of October, Porsche broke records by passing Volkswagen in terms of valuation in the stock market.
Thursday turned out to be a big day for Porsche as its shares rose to €93. The new share price put the automaker at a valuation of €85 billion (approx. $82.77 billion).
Volkswagen as of then was valued at €77.8 billion (Approx. $75.8billion) which led to its demotion from the first to the second rank while Mercedes stayed stable at the third position with a valuation of €57.2 billion (Approx. $55.70. The Top 3 were followed by the likes of BMW and Stellantis at €47.5 billion and €39.7 billion ($46.26 and $38.66), respectively.
On the first day of the IPO of Porsche in the German Stock Exchange, its valuation at the closing of the day was €75 billion ($73.03billion), with shares closing at €82.50 ($80.34). The stock saw a fall to €81 ($78.88) earlier in the week, but then had a steady ride to €93 a share by Thursday before falling to €91.04 ($88.65) and a valuation of just under €84 billion. Even at these numbers, Porsche was significantly more valuable than its parent company Volkswagen.
Porsche has raised €19.5 billion ($18.99 billion) from its IPO.T he strange part in it is that a little less than half of this amount went to Volkswagen itself. The valuation at which Porsche stands currently made it the fifth-most valuable company listed in Germany, trailing Linde, SAP, Deutsche, Telekom, and Siemens. According to Reuters, it was the 25th most valuable listed company in Europe.
The shares of Porsche sold between Sept 29 and Oct 4 represented around 11 per cent of the total trading volume from the time of the listing consisting of around 34 million shares. The total shares exchanged were 14.85 million shares worth €1.2 billion ($1.6 billion) available via the greenshoe option in the four weeks after the offering as a stabilization measure. Considering the liquidity of the share market, Volkswagen may rise back the ranks and retain the first position in the European market. This will be a challenging task considering that Porsche is a well reputed and customer centric brand which has gained popularity and respect among customers with its models.
Moreover, now that Porsche is also looking to enter Formula 1, that brand value is going nowhere but up! Formula 1 is a very popular sport in the European continent and its constant rise in popularity will prove beneficial for automotive manufacturers as far as their brand values are considered. The US still stands to be an untapped market which will lead to many deep pocketed sponsors for a lot of the teams. Porsche’s entry will add even more interest from them as well and who knows, maybe Porsche could compete with the valuations of Tesla!
