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Porsche listing: Volkswagen defies gloom, goes ahead with IPO plans at 82.5 euros per share

By Jenny McCall


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A image of a Porsche car
Porsche shares at €82.5 ($79.32) per share and moving forward with the IPO - Photo: Getty Images.

Today is the day that Porsche made its stock market debut on the Frankfurt stock exchange. Trading under the stock ticker P911, Volkswagen (VOW3) has now demerged from its luxury car division and defyed the naysayers by pricing Porsche (P911) shares at €82.5 (£79.32) per share, which is the top end of the initial range given at the start of the month. 

"Porsche Group (P911) has successfully crossed the finish line of its initial public offering (IPO). With the ringing of the bell at the Frankfurt Stock Exchange this morning, Porsche, one of the world's most successful sports car manufacturers, is entering a new era with increased entrepreneurial flexibility," Porsche said in a statement. 

This spin-off of Porsche (P911) makes it one of Europe’s largest stock market floats on record, according to data from Refinitiv.

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Volkswagen (VOW3) share price chart

Analysts say VOW3 Porsche IPO is oversubscribed

More good news came VW’s way, as analysts at Jefferies reported on Monday, when they forecast that  the Porsche IPO will be priced at the top end of its stated range.

Jefferies is bullish on Porsche’s IPO and went against the previous consensus from brokers concerned that the valuation was too high.

“We expect the Porsche IPO to price at the very high end, if not slightly above the stated range,” analysts including Philippe Houchois wrote in a note to clients Monday.

This sentiment is shared by others, who have already commented on how “oversubscribed” the Porsche IPO has become.

Saxo Bank’s Head of Equity Strategy, Peter Garnry wrote in a note: “Volkswagen VOW3 plans to sell 25% of preferred shares on the market with news that the offering is already multiple times oversubscribed across the whole price range from €76.50 to €82.50. Qatar Investment Authority, Norway’s Sovereign Wealth Fund, and T. Rowe Price have already committed themselves in the IPO.”


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Shareholders may lose out

But it may not be all good news.

The car group previously promised it will pay 49% of its proceeds in a special dividend to all shareholders, may not materialise as the group intends to invest in its Electric Vehicle (EV) range – which may mean it has to use its dividend money for the expansion.

Garnry points out – there are two fundamental reasons why VW (VOW3) is selling shares in Porsche.

“Reduce the valuation discount on Volkswagen (VOW3shares from the cross-holdings and unlock more value from a pure luxury brand play (Porsche). In addition, the public offering raises capital for Volkswagen's very capital-intensive switch to being an all-electric vehicle maker over the next decade,” Garnry said.

This push into the EV space could cost VW (VOW3shareholders and reduce the dividend it pays to them, as it needs to fund its EV venture.

“The growing cost-of-living crisis as soaring energy costs are reducing disposable incomes in Europe. The sector that is the most at risk from lower demand during this challenging period is the consumer discretionary sector in which the car industry sits,” Garnry said.

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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