Porsche IPO Draws Near but Will It Get the Valuation Volkswagen Wants?
The Porsche IPO is expected to kickoff on the Frankfurt Stock Exchange on September 29. It could be one of the largest in European history.
We have all known it was coming for a while now, but the Porsche IPO is almost here. And it will be a big deal in many ways. It is being spun off from Volkswagen for a couple of reasons. One of them is the fact that VW needs cash. A lot of cash. They want to build all-electric cars and to make that change costs money. Money to develop the cars and tool the factories. The hoped-for valuation is 75 billion euros (about $72 billion). That is a big number especially considering state of the market recently. According to data company Dealogic global IPOs in 2022 have been worth only about one third the amount from last year. And in Europe to delta is even greater. IPOs in Europe in 2021 had a total value ten times more than amount in 2022 thus far.
But this is not deterring Porsche, Volkswagen or potential investors. The Guardian is reporting that advance requests for shares has far outstripped supply so far. If you thought getting a GT4 RS allocation was tough, you may not even be able to get an allocation for a share of stock that builds the GT4 RS. These are truly interesting times that we live in.
Porsche Independence
After the IPO do not expect Porsche to return to the days of being a small, independent sportscar maker. Those days are gone forever. “The Porsche-Piëch family, Volkswagen’s largest shareholder, will receive about a quarter of the voting shares in Porsche, a decade after they ceded control to VW. Oliver Blume was elevated to lead Volkswagen when Herbert Diess was given the boot in July but stayed on top of Porsche as well.”
Porsche isn’t Ferrari
Porsche makes amazing vehicles. They make top notch sports cars, and their SUVs are highly regarded as well. But a base Macan, as good as it may be, is not a luxury item similar to Ferrari. The cheapest Porsche Macan starts at $57,500. The cheapest Ferrari is the Roma which starts at $226,570. That is massive difference obviously. As great as Porsche is, they are not the same type of luxury brand as Ferrari. Ferrari shares trade at 38 times its earnings per share. VW trades at 4 times its earnings per share. Porsche will likely be somewhere in between, but VW is hoping Porsche is closer to the Ferrari side of the equation. That remains to be seen.
Are You Buying?
Some folks loaded up on rare Porsche sports cars in the last couple of years and managed to flip them for profit. Now it is your chance to make money with an actual investment instrument. Are you looking to get on board and hope for some solid returns? Or are you going to sit this one out and just focus on driving the cars they build? Let us know your thoughts in the Rennlist forums.
Images: Joe Kucinski; Porsche
Join the Rennlist forums!
