Photo: Porsche
As Porsche prepares for the initial public offering (IPO), Volkswagen’s supervisory board is set for a meeting this Sunday to discuss the details. Porsche intends to offer 911 million shares, a number chosen to mirror the name of its iconic model.
Porsche is confident it will be able to pull a successful IPO, considering the high profile of its potential investors. Investor interest in the IPO is strong, despite the turmoil at Volkswagen and the market conditions being far from ideal. The 911 million shares Porsche intends to place on the market will be divided into 455.5 million preferred shares and 455.5 million ordinary shares. Porsche SE, Volkswagen’s top shareholder, has already committed to buying 25% plus one of the ordinary shares at a 7.5 percent premium to the preferred shares.
Initial estimates indicate that Volkswagen Group aims for a 70-80 billion euros ($70-80 billion) valuation, which is still disputed by various analysts. An analyst note from HSBC valued the sportscar maker at a much lower 44.5-56.9 billion euros. It’s a big unknown at this point which way the market sentiment towards Porsche will swing. Considering the harsh market conditions, Porsche might be in for a nasty surprise.
According to a Reuters report, its target valuation is also very ambitious, especially considering that Volkswagen has a market valuation of around 89 billion euros. Porsche’s prospects are not exactly rosy at the moment. With only one electric vehicle in the lineup (Taycan) and the second (Macan EV) still four years away, Porsche is not doing very well in a market where electric vehicles are poised to dominate.
Porsche is the milk cow of the Volkswagen Group, with the highest margins per vehicle, but that could change in an instant. Taycan production has peaked at around 40,000 units per year, indicating the interest is waning, or Porsche has maxed out its production capacity. The other models in the lineup will see a rapid phase-out as more and more countries will ban ICE vehicles in the next decade.
Due to uncertain market conditions, many companies have refrained from listing in the past year. For the few cases that we remember in recent history (Rivian being one of them), after a short period of going up, share prices have collapsed and dwindled ever since. We’ll see how Porsche’s IPO will go.
Initial estimates indicate that Volkswagen Group aims for a 70-80 billion euros ($70-80 billion) valuation, which is still disputed by various analysts. An analyst note from HSBC valued the sportscar maker at a much lower 44.5-56.9 billion euros. It’s a big unknown at this point which way the market sentiment towards Porsche will swing. Considering the harsh market conditions, Porsche might be in for a nasty surprise.
According to a Reuters report, its target valuation is also very ambitious, especially considering that Volkswagen has a market valuation of around 89 billion euros. Porsche’s prospects are not exactly rosy at the moment. With only one electric vehicle in the lineup (Taycan) and the second (Macan EV) still four years away, Porsche is not doing very well in a market where electric vehicles are poised to dominate.
Porsche is the milk cow of the Volkswagen Group, with the highest margins per vehicle, but that could change in an instant. Taycan production has peaked at around 40,000 units per year, indicating the interest is waning, or Porsche has maxed out its production capacity. The other models in the lineup will see a rapid phase-out as more and more countries will ban ICE vehicles in the next decade.
Due to uncertain market conditions, many companies have refrained from listing in the past year. For the few cases that we remember in recent history (Rivian being one of them), after a short period of going up, share prices have collapsed and dwindled ever since. We’ll see how Porsche’s IPO will go.
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