Investors don’t always hate traditional car makers, it turns out. From Germany to Detroit, the whole auto industry needs to learn from the success of Porsche’s initial public offering.
Shares in the sports car brand rose less than 1% on their first trading day Thursday, giving it a market value of about €75 billion, equivalent to roughly $73.5 billion. Parent company Volkswagen and its advisers were trying to pull off a balancing act with the IPO price. Set it too high and they risked burning bridges with investors who might buy into other assets VW potentially has to offer, such as its startup battery business PowerCo. Price it too low and they would confirm investors’ worst fears that VW is incurably in thrall to its controlling shareholder, the Porsche and Piëch family investment vehicle, which got half of the Porsche shares VW just sold.
Porsche IPO Blazes Trail for Other Auto Makers
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