According to a report by Bloomberg, Porsche is poised to price its initial offering of stock at the high end of the planned range. There is strong demand for shares of the iconic sports car maker. That demand isn't helping the Volkswagen stock.
Volkswagen ticker: VOW 3. Germany is selling 114 million shares of Porsche to the public. Porsche will have 911 million shares of preferred and ordinary shares outstanding after the offering. The sale is expected to raise more than $9 billion for VW at the high end of the planned range, €82.50 or $80. Volkswagen and Porsche didn't respond immediately to a request for comment on final IPO pricing. The reason why Porsche shares are sold is because of the increase in cash. The reason is to give Volkswagen stock a boost. Porsche is expected to have a market value of $75 billion after the IPO. Volkswagen has a market cap of about $83 billion. Volkswagen's stock isn't doing much on the news of strong IPO pricing. VW's ordinary shares rose by 1.3% on Monday. VW preferred shares fell by 0.3%. The preferred stock was down almost 4% and ordinary shares fell by 3% this past week. The investors have been talking about the Porsche IPO since the beginning of 2022. The market value of Volkswagen barely has changed since the IPO momentum heated up in early September. It's up about $1 billion, or a little more than 1%. The VW ordinary and preferred shares have declined by about 26% and 22% this year. The market's value is still higher in recent trading, which is OK considering the state of the market. The S&P 500 has declined 6% since September. The stock of General Motors has declined by about 7% over the same period. The Porsche IPO might create some value for Volkswagen shareholders by showing all investors exactly what Porsche is worth. There are two things that can hurt demand for all cars, including Porsche cars, because investors are focused on other things, such as a slowing economy and rising interest rates.