Porsche IPO: What to Know

October 12th, 2022 by

Porsche IPO Could Be Huge

Volkswagen is finally moving forward with plans to take Porsche public through an initial public offer (IPO) towards the end of September or early October. Analysts estimate a hefty valuation of between $59.6 billion to  $84.5 billion. If this estimation comes to pass, this will make the Porsche IPO the largest in the history of Germany and the biggest in Europe since 1999. It will be more than double the size of Ferrari’s and ahead of Ford’s market cap.

Volkswagen plans for electrification

Volkswagen has plans to use the proceeds from the IPO to intensify its efforts to manufacture more electric vehicles. Being the world’s second-largest car company, Volkswagen has realized that the future of transport is electric and is investing heavily in the electrification of car manufacturers by volume. This German automaker has set a goal to have around 20% of its vehicle sales to be electric by 2025. Porsche is reportedly making an all-electric Porsche Panamera which is due for a refresh next year.

The Porsche Family Will Be Granted the Preferred Shares With Voting Rights

Volkswagen stated that it is 12.5% only of Porsche’s shares, are available to individual investors as preference shares, and they will be non-voting shares. Meanwhile, the Porsche family will receive the rest, as they are currently controlling the company. However, Volkswagen further added that shareholders and investors would receive a special dividend at the beginning of next year. The remaining proceeds will facilitate the building of more electric vehicles.

There Is a Leadership Shake-up at Volkswagen

At the beginning of September this year, the former Volkswagen CEO, Herbert Diess, was replaced by Oliver Blume, who will control both Porsche and Volkswagen after the IPO. It came as a surprise and would probably raise concerns to the investors as they wonder if it will be easy to have one CEO managing the two publicly traded car companies. This move has created uncertainty, and there might be conflicts of interest for Oliver Blume as he tries to manage two separate companies.

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