The separation between Volkswagen and Porsche hit the books Thursday morning, when Porsche started trading under the ticker P911. The initial public offerin price range was set Wednesday evening at €76.50 to €82.50 (around $73.50 to $79.50) per share. IPO shares were offered at the top end of the price range and valued the company at €75 billion ($73 billion).
Porsche sold approximately 113.9 million shares, including an overallotment of 14.9 million, and shares were trading at around €85 in early afternoon action Thursday.
VW pocketed €9.4 billion in the deal, Europe’s largest IPO since commodity trader Glencore raised around €11 billion in its 2011 IPO. And it came at a time when the IPO market is solidly in the doldrums. Global IPOs have dropped by 70% compared to last year’s second-quarter SPAC-fueled total of $133.1 billion. The second-quarter total of $36.6 billion in proceeds was even below the $43.6 billion total in the pandemic second quarter of 2020.
In the second quarter of this year, total proceeds from North American IPOs amounted to a paltry $4.7 billion, less than the $12 billion raised in Europe, the Middle East and Africa and the $20 billion raised in Asia-Pacific. Interestingly, SPAC IPOs in the United States accounted for half (17) of the quarter’s IPOs and $2.2 billion of the proceeds, according to PricewaterhouseCoopers.
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According to IPO ETF manager Renaissance Capital, 64 IPOs have been priced in the first three quarters of 2022, compared to 397 in all of 2021. Proceeds have totaled $6.5 billion this year, compared to an annual total of $142.4 billion in 2021.
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Porsche’s ownership structure is complicated. According to Bloomberg, VW retained ownership of 75% of the stock. The remaining 25% was split in half, with 12.5% issued as non-voting shares and the other 12.5% going to VW’s largest shareholders (the Porsche and Piech families). A large portion of the 12.5% of the non-voting stock is headed to four cornerstone investors: Qatar Investment Authority, Norway’s sovereign wealth fund, T. Rowe Price and Abu Dhabi’s ADQ sovereign wealth fund. The free float amounts to 7.5% of Porsche’s stock.
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At the IPO price, Porsche stock traded at a discount of about 60% to Ferrari. Since its IPO in October 2015, Ferrari stock has risen by about 270%. The stock posted its all-time high of $278.78 last November and closed at $191.23 on Wednesday.
Porsche has set a revenue target of up to €39 billion for the current year, with a gross margin of up to 18%. In addition to the iconic 911, Porsche has introduced a number of models, including a Macan SUV, a four-door Panamera and an all-electric Taycan.
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