Porsche is now Europe’s most valuable automaker

On Thursday morning, Porsche stock soared to €93 ($91.95), valuing the brand at 85 billion euros ($84 billion) and topping VW’s valuation of 77.7 billion euros. Porsche’s rating also places it ahead of Mercedes-Benz, BMW and Stellantis.

Earlier in the week, the stock briefly dipped below €81, but recovered as investment banks participating in the IPO bought nearly 3.8 million shares for 312.8 million euros in order to support the listing thanks to the option greenshoe. This is an over-allotment option that allows the company to control the variations of its share during its IPO.

To avoid too great a range of prices, downwards or upwards, the company offers the lead bank an option on a certain number of shares. If the price rises too quickly, the bank exercises the option and sells its securities. It has the obligation to sell at the introductory price, which automatically lowers it. Conversely, if the price falls too sharply, the bank buys as many securities as its reserve allows.

These shares, purchased between September 29 and October 4, represent about 11% of the total trading volume since Porsche’s listing.

CNN reports that up to 14.85 million shares worth 1.2 billion euros are available through the option greenshoe within four weeks of listing. Bank of America is among those who acquired the stock through an option greenshoe between €81 and €82.50.

“Inflation data in Europe and the United States, recent concerns over energy supply in Europe and the escalation of the war in Ukraine last Thursday have led to fluctuations that have required stabilization measures”confirmed a Volkswagen spokesperson.

Porsche went public at the end of September in Frankfurt at a price of €82.50. The Volkswagen Group’s decision to sell a 12.5% ​​non-voting stake in the company raised approximately 9.4 billion euros ($9.1 billion), making it the second-largest large IPO of Germany.

Proceeds from the IPO will be distributed to existing shareholders and help fund VW’s transition to fully electric vehicles.

“This IPO is a key element for the group, especially since the potential product will give us more flexibility to further accelerate the transformation”said Arno Antlitz, chief financial officer of Porsche, in a statement.