Porsche shares rise in first day of trade

Porsche's shares were higher in the first day of trade on Thursday after pricing at the top end of the range.

Porsche P 911, preference shares that do not carry voting rights, increased to €82.72 after pricing at €82.50, giving it a market cap of €75 billion $72 billion. Porsche has 911 million shares outstanding, a nod to its most famous product. It is the biggest IPO in Germany in more than 25 years.

Volkswagen VOW 3 shares declined by 5%. Porsch Automobil Holding PAH 3, the investment vehicle that agreed to pay the IPO price plus 7.5% for a quarter of Porshe with voting rights plus one share, fell 7%. VW is planning to distribute 49% of the proceeds in a special dividend in December, and set a December meeting to put the proposal to a shareholder vote. Volkswagen raised about $19.5 billion through the IPO. Tom Narayan, analyst at RBC Capital Markets, said Porsche's market value is 88% more than VW's €85 billion market cap at the IPO price, which represents a corporate governance discount given VW s continued control, as well as the dual CEO role of Oliver Blume at both Porsche AG and VW. He said that Porsche SE, the investment vehicle, is buying the stock at 6 x estimated 2023 earnings before interest, tax, depreciation and amortization, versus his estimate that a standalone valuation should be above 10 x EBITDA. Despite a difficult environment, Porsche's IPO The IPO, which has the backing of Qatar's investment authority and Norway's sovereign wealth fund, proved to be well received. Porsche said it was sensitive to skyrocketing natural gas costs, as well as skyrocketing natural-gas costs. It makes most of its vehicles in Germany and Slovakia. Its top market is China, whose economy has suffered from continued lock-downs in response to COVID-19.