German sports car maker Porsche roars onto stock market with £70bn float

Sports car maker Porsche braved global financial turmoil when it made its stock market debut worth nearly £70 billion.

On an exciting ride for investors, shares of the Stuttgart-based Frankfurt-based company began trading at €82.50 each in one of Europe’s largest ever listings.

The stock, which has been given the ticker ‘P911’ after its famous 911 model, rose to €86.76 before falling back to its opening price, making it worth £67 billion.

Porsche’s performance is closely watched as one of the few blockbuster stock market listings still going ahead as volatile global markets are plagued by rampant inflation and rising interest rates.

It is the latest luxury car manufacturer to go public, following Ferrari’s dual listing in the US and Italy and the disastrous IPO of Aston Martin in London.

Porsche owner Volkswagen listed a 12.5 percent stake in the company, with the deal raising just over £17 billion in funds.

A total of 911 million preference shares were offered to investors – as a nod to the best-known model – but they have no voting rights.

This means stock investors have little say in running the iconic car brand.

Oliver Blume, who is CEO of both Volkswagen and Porsche, said it was a “dream come true” for the company.

He said the float, Germany’s largest since Deutsche Telekom in 1996, will help accelerate electrification efforts.

Porsche aims to have more than 80 percent of its new cars be battery-electric by 2030.

Blume: ‘Our increased degree of autonomy puts us in a very good position to achieve our ambitious goals in the coming years.’

Porsche’s performance will be closely monitored after vastly different experiences at Ferrari and Aston Martin.

The latter’s value has plummeted since its listing at £4.3bn in 2018, while Ferrari has thrived, especially in New York, where it is now worth £32bn.

High performance: Porsche shares – which were given a ticker P911 after the famous 911 model – rose to €86.76 before falling back to the opening price

Seeing its shares collapse, Aston Martin launched a £576m rights offering earlier this month to reduce its mountain of debt, invest in new electric vehicles and move closer to a medium-term target of £2bn in revenue by 2024-25. In contrast, Ferrari’s share price has skyrocketed.

Regardless of Porsche’s performance, analysts don’t believe it will pave the way for another wave of initial public offerings (IPOs) or IPOs.

Klaus Schinkel, General Manager and Head of Germany at Edison Group, said: “Porsche’s successful IPO is undoubtedly an important milestone for the German and European equity markets.”

He added: “While it is a positive sign that despite the current political and economic turmoil, companies can go public, Porsche’s IPO is a very special case because of its massive size, strong brand and support from strategic shareholders.”

Shaken: James Bond with an Aston Martin. The British sports car maker has seen its shares collapse since its £4.3bn listing in 2018

Last year, Porsche supplied more than 300,000 vehicles worldwide and reported profits of £4.7 billion. It has factories in Stuttgart and Leipzig and has about 37,000 employees.

Laura Hoy, analyst at Hargreaves Lansdown, said: “Investors were eager to get in the driver’s seat, with stocks issued at the higher end of the proposed range. Despite lingering concerns about a rising cost of living, investors support the group’s proposal.

Porsche is targeting high net worth individuals, a population that is unlikely to suffer much from the rising cost of living.

“That means triple-digit price cars will continue to see sales grow as their cheaper counterparts stagnate.”