Porsche to launch IPO in September, targets $85 billion valuation

Porsche hits 85B euro valuation & becomes Europe’s most valuable carmaker

Porsche hits an 85 billion euro valuation as the company is listed on the market. It is now Europe’s most valuable car maker, above Volkswagen. Investment banks bought 3.8 million shares to help list a quarter of the greenshoe options exercised.

Porsche to launch IPO in September, targets $85 billion valuation
Image credits – Team BHP

Porsche shares had called below their listing price on Monday to 81 euros in line with a wider fall in markets. However, later the price rose to 93 euros at 1023 GMT. At that point, the sportscar maker reached a market valuation of 85 billion euros. The price momentum is after investment banks purchased almost 3.8 million shares for 312.8 million euros. It is part of the investment bank’s greenshoe option.

As a result, the rise pushes Porsche’s valuation beyond Volkswagen’s 77.7 billion euros. Mercedes-Benz comes in third among European carmakers with a 57.2 billion euro valuation, followed by BMWG.DE with 47.5 billion euros and Stellantis with 39.7 billion. A spokesperson of Volkswagen said, “Inflation data from Europe and the United States, recent worries over energy supply in Europe, and the escalation of the war in Ukraine last Thursday led to fluctuations which made small-scale stabilization measures necessary.”

Stabilization measure

The shares purchased between Sept 29. and Oct 4. represented around 11% of the total trading volume since the listing, the spokesperson added, consisting of around 34 million shares. Overall, up to 14.85 million shares worth 1.2 billion euros are available via the greenshoe option in the four weeks after the offering as a stabilization measure. Bank of America acquired the shares for between 81 – 82.50 euros, compared to the original issue price of 82.50, it said in a statement on Wednesday.

A week ago, its valuation was at $73 billion. The initial public offering, which raised more than $9 billion, was Europe’s largest in over a decade. Back then, analysts pointed out that the valuation is too high. Analysts at HSBC Holdings Plc poured cold water on the lofty valuations being assigned to Volkswagen AG’s Porsche unit ahead of a share sale by the sportscar maker that’s set to be one of Europe’s biggest initial public offerings.

On the other hand, FT stated that “luxury valuation may prove elusive.”However, it rose to a much higher market valuation within a week. According to the post, a banker stated, “If there is one company that can list in the current environment, it is Porsche.” Porsche’s owner, Volkswagen, is braving this grim backdrop because it needs to fund its own costly adaptation to the era of electric vehicles. VW has already committed €52bn to its electric future and will spend more to manufacture battery cells.