Porsche shares rise on stock market debut

Porsche shares went up on their first day of trading after the sports carmaker shrugs off a worsening global economy in a €75 bn 67 bn stock market float, the largest European listing for more than a decade.

The shares were issued at €82.50 on the Frankfurt stock exchange on Thursday before rising in value to €86.30 by late morning.

Volkswagen listed 12.5% of Porsche's shares to raise the billions of euros needed to invest in electric cars as well as hope the sports car company would be able to match Italian rival Ferrari, which has been able to attract a valuation more typical of luxury fashion brands.

The deal raised €19.5 billion, about half of which will go to Volkswagen. Volkswagen intends to pay dividends using a portion of the proceeds.

Since their foundations, Porsche and Volkswagen have been linked to each other, when Ferdinand Porsche founded a car company in the 1930s, while the companies will be listed separately, they will retain the same chief executive, Oliver Blume, suggesting there will be little change in management style or strategic approach to the electric transition.

The Porsche-Pi ch family, Volkswagen's largest shareholder, will be able to regain control of Porsche a decade after they ceded control of it to Volkswagen.

Dom Tribe, a partner and automotive sector specialist at Vendigital, said that this initial public offering will make it possible for the Pi ch family to regain a controlling stake in Porsche, a move that probably wouldn't be feasible any other way.

It will also provide a large injection of funds to accelerate VW's ambitious plan to overtake Tesla as the world's leading electric vehicle manufacturer by 2024, which could cost the company in excess of 50 billion dollars. Reuters reported that Blume was very positive about the opening price. He has also rejected criticism of his roles as chief executive of both companies. Blume said that there was no time horizon in which it would be evaluated. "We made this decision very deliberately," he said, referring to a Porsche Taycan, an electric vehicle, parked outside the Frankfurt stock exchange.