Behind Porsche’s “blockbuster” IPO

Recently, sports car manufacturer Porsche went public for the first time on the Frankfurt stock exchange with one of Europe’s largest listings in years, leveraging its brand power. to defy the turmoil of the global market.

The “blockbuster” IPO deal…

Its shares rose to more than 84.70 euros ($81.90) in morning trading, well above the 82.50 euro price set by parent Volkswagen and outperforming the weak Frankfurt market . This bold IPO has given Porsche a valuation of more than 76 billion euros.

Outside the stock exchange before the Porsche IPO in Frankfurt, Germany. Reuters photo.

The automaker’s chief executive, Oliver Blume, said the listing was a “historic moment for Porsche”, as he rang the bell to mark the start of trading at the Frankfurt exchange.

“A big, proud day for all of us. We are adding a new chapter to the unique history of Porsche,” said Oliver Blume, CEO of German car manufacturer Porsche.

In terms of the value of shares issued, Porsche is the largest stock market debut in Germany since the launch of Deutsche Telekom in 1996, and also the largest in Europe since its emergence in 2009. 2011 by the Swiss-based commodities giant Glencore.

Oliver Blume, CEO of German car manufacturer Porsche.

Analysts have been looking to Porsche’s entry for cheers amid a slowing economy, with investment bank Berenberg saying the Porsche IPO will likely “provide an edge” a catalyst in an industry so lacking in positive surprises.”

It can be said that the deal has also created a big buzz in Porsche’s home market in Germany, where leading newspaper Bild describes it as “crazy and wonderful”. “Porsche sports car icon goes full throttle and races on the stock market,” a column in the newspaper snatched the title.

In addition, the launch of Porsche also attracted interest from major investors, including the public investment fund of Qatar and Abu Dhabi, the sovereign wealth fund of Norway and the asset management company. of the US T. Rowe Price.

This IPO saw 113.9 million shares issued and with a valuation of 76 billion euros, Porsche AG moved ahead of rivals such as BMW, with a valuation of 47 billion euros, and Mercedes-Benz, with capital. valued at 56 billion euros, second only to “giants” such as Tesla, Volkswagen and Toyota.

What is the future of electricity?

Initially, Porsche’s parent company Volkswagen was expected to raise 9.4 billion euros ($9.2 billion) from the listing, with some of the capital going into the group’s shift to electric vehicles, aimed at becoming a real counterweight to America’s Tesla.

Porsche factory in Stuttgart-Zuffenhausen, Germany. Reuters photo.

According to analysis by Blooberg Intelligence, the German auto giant is poised to overtake Tesla in electric vehicle sales by 2024. Volkswagen has set a target for electric vehicles to account for a quarter of sales by 2026. supported by the launch of 16 battery-powered models, including the Audi A4 e-tron, Audi A6 e-tron and Volkswagen ID. Proceeds from this IPO could help fund the $50 billion Volkswagen plans to invest in electrification over the next five years.

Meanwhile, Porsche has also recently made a number of moves towards going green, including investing in fuel, building a network of Porsche-branded charging stations in Europe and the planned launch of Porsche. its iconic 718 roadster by 2025. Its Taycan EV electric model has surpassed flagship brand 911 in sales, fueling Porsche’s plan to electrify 80% of its portfolio by 2030 In fact, Porsche generates almost a quarter of Volkswagen’s operating profits.

However, parent company Volkswagen is suffering a potential loss as rising costs, supply chain constraints and inflation begin to affect the industry and threaten to dent the company’s sales.

Besides, although Porsche’s IPO is creating excitement, concerns around governance are growing at Volkswagen. The dual role of Oliver Blume, who has held the top job at Porsche and was recently appointed CEO of the Volkswagen group, is causing concern to investors.