The long-awaited IPO of Porsche will start in a few weeks. Investors can bet on it through Volkswagen shares.
The biggest IPO of the year has been given the green light. Volkswagen said on Tuesday it would go ahead with an initial public offering of its Porsche sports car division despite the difficult market situation. We'll discuss what this means for VW investors and how to ideally play the IPO in this article.
The German automaker, which has been considering the move since February, said it plans to list Porsche on the Frankfurt Stock Exchange in late September or early October.
Porsche's valuation ranges from 60 billion euros ($58 billion) to 80 billion euros, potentially making Porsche's IPO the largest ever on the German market.
Investors will be able to buy Porsche's preferred shares, which carry no voting rights.
Porsche Automobil Holding is the family holding company that owns most of Volkswagen - it will acquire 25% plus one Porsche share at the common stock placement price plus a 7.5% premium to the preferred price.
"Obviously, this is…
One way to play the Porsche IPO is to buy VW shares. The investment thesis, apart from the aforementioned dividend for VW shareholders, is based on the fact that this transaction could reveal the intrinsic value of the whole Volkswagen. If the stock market now values the entire VW Group at around €85 billion, and if the valuation of Porsche at the IPO is even just €60 billion, it is clear that the value of the other brands in the Group is higher than the remaining €25 billion.