Reacting to happier talk around the world, every stock on Germany’s DAX closed higher today. All stock but one: Volkswagen. After blowing through the rafters yesterday, the VeeDub share price boomeranged. Result: This morning, the DAX was in the tank by more than 7 percent. All other shares rose and did shine, but Volkswagen single-handedly brought the whole ship down. The Deutsche Börse, Germany’s stock exchange, is exasperated by Volkswagen’s wild gyrations. The Deutsche Börse is mad as hell and won’t take it anymore. As of this coming week, the VeeDub share will only make up 10 percent of the DAX, Germany’s equivalent of the Dow Jones, the Deutsche Börse decreed. Yesterday, VW represented 27 percent of Germany’s most watched index. The Euro Stoxx 50 will also reduce the weight of Wolfsburg’s shares. The German government loosed its dogs of watch to follow a trail of insider trading and market manipulation.
On Sunday, Porsche announced the jaw-dropping news that not only had Porsche increased their holdings to 42.6 percent of Volkswagen, they also had acquired options for another 31.5 percent. That made the stock shoot up faster than a heroin junkie. This morning, says DPA, Porsche cashed in some of their VW options, at a tidy profit. And the stock dropped like Wile E. Coyote when he’s suddenly realized he’s got nothing underneath him but air. VW opened at €510, went as low as €495.91. At 5:41 in the evening the stock was at €519, down €400.50 or 44 percent from the day before. The stock wasn’t the only thing that dropped. Shoes did follow.
Today, more and more analysts agree with TTAC’s opinion of yesterday that the money for buying Volkswagen may not come from pushing overpriced Porsche extras alone. “We think Porsche is foremost interested in large profits from the options trade,” Frank Biller, analyst at the Landesbank Baden-Württemberg, claimed. “As the stock will go down, they can finance the takeover without outside capital.” Klaus Kaldemorgen, Chief of Germany’s largest investment fond DWS, said how he really felt: “Irresponsible: Porsche is manipulating the VW stock.” Germany’s Bundesanstalt für Finanzdienstleistungsaufsicht, not quite the equivalent of the SEC, but close, dropped a hint via a spokeswoman: “We are monitoring the trade with VW shares for indications of insider trading and market manipulation.” Watch this space.
If Porsche caught a few hedge funds for suckers, hooray!
Let the screwers become the screwees for a change.
…dropped like Roadrunner who suddenly realized he’s got nothing underneath him but thin air.
Not to nitpick, but that would be Wile E. Coyote. The Roadrunner always seemed to find a way to keep running despite the lack of traction.
@ John R: Guilty as charged. I’m getting old ….
John R.
Not to nitpick your nitpick, but that’s Wile E. Coyote.
Some shrewd Krauts screwed some less shrewd Krauts. Where is harm in that? Don’t you wish that’s the only thing happened between 1938 and 1945?
And btw, is image of tulips signify that they are better suited on the organ then roses on the piano?
@Robert Farago:
Text Amended!
The math on this thing is clear as mud.
Would someone check the figures, or rewrite the text so that it makes sense?
Looks like it went from 510 to 519 which is a gain, not a loss, and none of those numbers are near 44% of any of the other ones. I may need more sleep, but it looks fishy to me.
@Landcrusher: Note “from the day before.” The day before, VW closed at 900 and change.
When VW went pubic (typo intended,) the share was peddled as the “Volksaktie” – the “people’s share.” It’s back to its roots.
It’s a stock for jo-jos.
Ah, now I can’t see why I didn’t figure that out. Thanks, Bertel.
The Chinese press (remember, VW started the kar kraze here in 1984 with the joint venture with SAIC) is full with headlines about Germany’s government drawing a bead on VW/Porsche.