Shares in luxury automaker Porsche rose as much as 6% on Thursday, taking its gains to nearly 13% since its launch on the Frankfurt Stock Exchange in Germany last week.
Porsche’s
P911,
preference shares were priced at €82.50 when it opened on Sept. 29, valuing it at €75 billion ($74 billion). It was Germany’s largest IPO in over 25 years.
On Thursday, shares shot up to highs of €93.28, outperforming the broader DAX
DAX,
which has increased 5% since the IPO.
See also: Want to buy Porsche stock in the U.S.? It’s complicated.
Volkswagen is planning to hand out 49% of the some $19.5 billion proceeds in a special dividend and will put the proposal to a vote in a shareholder meeting this December.
One of Europe’s largest IPOs even attracted illicit activity, according to Porsche, which said on its site that third parties were posing as the firm and making unlawful share offers before its IPO.
Auto submarket SXAP
SXAP,
is up 3% since the IPO and saw a short rally on Oct. 4 due to “macro improvement” in the European auto sector according to Alastair Mankin, vice president of the event driven group at Cowen.
He said that Porsche is now trading how people thought it would when it first listed.
“Last night Merrill Lynch, who is the stabilization agent, made their announcement as to how much stock they bought,” he explained. “That was only 3.8 million shares when in fact 11 million shares were traded at issue price or below.
“What that’s telling you is that long-only investors and cornerstone investors were buying lots of Porsche in the last couple of days despite the market weakness, which is a massive sign of confidence in the name.”
Supply squeeze
Supply chain disruptions from the war in Ukraine and the COVID-19 impact have slowed down Porsche’s inventory over the last two years. The automaker says normal levels are not expected to return until well into 2023.
Continent-wide, European car making is on the rise but supply is still below average, researchers say.
According to recent Bank of America research, European vehicle inventories have slumped 27% below the five year historical average in September.
European car inventories down on the 5-year historical average
BofA Global Research
Source: https://www.marketwatch.com/story/porsche-stock-continues-to-climb-after-ipo-11665052070?siteid=yhoof2&yptr=yahoo