“ Porsche has decided to make this announcement after it became clear that there are by far more short positions in the market than expected. ”įurther down in the same press release, Porsche lays bare their motivations and strategy with classic German humor: The Volkswagen shares will be bought in each case at market price. Upon settlement of these options Porsche will receive in cash the difference between the then actual Volkswagen share price and the underlying strike price in cash. At the end of last week Porsche SE held 42.6 percent of the Volkswagen ordinary shares and in addition 31.5 percent in so called cash settled options relating to Volkswagen ordinary shares to hedge against price risks, representing a total of 74.1 percent. “ Due to the dramatic distortions on the financial markets Porsche Automobil Holding SE, Stuttgart, has decided over the weekend to disclose its holdings in shares and hedging positions related to the takeover of Volkswagen AG, Wolfsburg. Here’s how the English version of the release began (emphasis added through this piece): On Sunday, October 26, 2008, Porsche issued a press release that would kick off one of the most famous short squeezes of all time. At that time, Porsche owned 42.6% of VW’s shares and the German state of Lower Saxony held 20.3%.
#VW STOCK SQUEEZE FREE#
That might not seem like a very high number, but as a percent of the company’s free float it was substantial. Because of its high debt load and diminishing prospects, the stock was a popular pick among short sellers and approximately 13% of the total shares outstanding were sold short. Like many manufacturing companies, VW was reeling from the global financial crisis. On Friday, October 24, 2008, Volkswagen’s (VW) stock closed at EUR 210 per share, down 50% over the prior two weeks. “ To me, left unchecked, the price of carbon goes to infinity.
0 kommentar(er)
