The German stock market will be temporarily relieved by the persistent focus on gas supply when Porsche goes public on Thursday. The IPO is anticipated to be the second largest in German history and the third largest in Europe.
Furthermore, TechCrunch reported that the IPO would lead the firm to be the fourth-most valuable manufacturer in the world. Interestingly, it garners billions of dollars to boost its parent company Volkswagen‘s march toward electric vehicles.
Porsche AG’s first public offering on the Frankfurt Stock Exchange is valued at $79 per share, making it one of Europe’s largest-ever listings. Meanwhile, Volkswagen is projected to get more than $9 billion in return for its investment, positioning it to contend with Tesla.
According to Bloomberg Intelligence, the EV giant is on track to dethrone Tesla in sales by 2024. In fact, Volkswagen announced a target of having EVs account for a quarter of company sales by 2026, which will be aided by introducing 16 battery-electric vehicles. This includes the Audi A4 e-tron, Audi A6 e-tron, and Volkswagen ID. Buzz van.
Notably, the IPO proceeds might help support Volkswagen’s $50 billion investment in electrification over the next five years.
It is worth emphasizing that investors have a significant amount of confidence in Porsche, as evidenced by the high share price. Impressively, it is on track to become the fourth-largest automotive business by valuation, behind Volkswagen, Tesla, and Toyota. Despite the fact that the company offered just 911 million shares, the offering garnered a high share price.
On the other hand, Porsche accounts for about a quarter of Volkswagen’s operational profit.
This might result in a loss for VW when growing prices, supply-chain restrictions, and inflation continue to stress the sector and endanger sales.
Porsche has invested in efuels, established a network of Porsche-branded charging stations across Europe, and plans to electrify its legendary Porsche 718 roadster by 2025. Furthermore, Porsche’s Taycan EV has surpassed the 911 sales, bolstering the company’s aspirations to electrify 80% of its range by 2030.
“The main question for potential shareholders in Porsche is whether the company can make a successful transition to become fully EV while preserving or even expanding margins. It is clear when you compare Porsche to Ferrari that there is room for improvement and a potential upside if Porsche can improve its operations and expand on its already strong brand,” said Peter Ganry, head of equity strategy at Saxo Bank.
