By
Darya Rudz
September 6th, 2023
After the successful IPO, the market valuation of the European automaker soared to about 84 billion euros.
Porsche overtook Volkswagen after completing its IPO to become the most valuable European automaker after its share price soared. Porsche also remained the 25th most valuable company in Europe and the 5th most valuable listed publicly in Germany. Reuters reported this on Thursday after Porsche shares made a recovery after an initial downward swing.
Public Listing: A Bold Move
For most of the year, many companies avoided an IPO because of the prevailing macroeconomic conditions. An energy crisis, rising interest rates, and record inflation have dragged the market down.
The decision of VW Group, the parent group of Porsche, to move forward with its IPO, as announced in February, was always going to have consequences. The bold move turned out to be Europe’s biggest listing since miner Glencore Plc.
For the IPO in September, Porsche set the price for 911 million ordinary and preference shares at an average share price of 82.50 euros. Following a general market rout, the shares initially fell on Monday to 81 euros, a price below its listing price. However, it spiked to 93 euros ($91.95) on Thursday before settling at 91 euros.
There are suggestions Porsche’s share price recovered after the initial drop because investment banks involved in its flotation pumped in funds. One of the banks, Bank of America, supported the stock by purchasing shares from the date of listing till October 4. Together, the banks purchased 3.8 million shares at 312.8 million euros.
Comparing Porsche to Other European Automakers
After the successful IPO, the market valuation of the Porsche automaker soared to about 84 billion euros. In comparison, Volkswagen has a 77.7 billion euros valuation. What makes this interesting is that Porsche sells about 300,000 cars yearly, while Volkswagen sells about 10 million automobiles annually.
The rest of the top 5 European automakers are Mercedes, BMW, and Stellantis. Mercedes-Benz places third with a market valuation of 57.2 billion euros. BMW is the fourth European automaker on the list with 47.5 billion euros, while Stellantis is fifth at a 39.7 billion valuation.
Meanwhile, Porsche is working on its most significant vehicle yet. The car, K1, will be a fully electric three-row SUV. It could be available in the US market for sale as early as 2026.