From private driveways to public markets

Source: Porsche.com

Depending on who you ask, the Porsche 911 Carrera conjures images of either an open desert road or an incoming midlife crisis. And now, a potential goldmine for investors. 

The sports car’s iconic brand, owned by Volkswagen Group and loved by suburban dads everywhere, will debut on the Frankfurt Stock Exchange later this month, selling ~25% of its shares with hopes of fetching a valuation of US$75 billion.

Why it matters: Porsche’s offering would be one of the biggest of 2022 and one of the largest ever in Europe, valuing the company higher than its German rivals BMW and Mercedes.

Catch up: The move will also launch the company back into the stock market 13 years after facing its own Uno Reverse scenario in which it tried to buy Volkswagen, failed, and ended up getting bought by Volkwagen instead. 

• Since then, Porsche has become one of Volkwagen’s top-performing brands. Despite making 2.5% of the group’s cars in 2019, which was before the pandemic and the chip crunch that followed, it accounted for a tenth of its revenues. 

Zoom out: There’s little excitement around initial public offerings these days, given that tightening monetary policy around the world has sent markets into shock, but the company is hoping the funds (up to $19 billion will) help pay for Volkswagen’s shift to electric vehicles.