VW

Porsche raises stake in VW to over 50 percent

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(Update: Today (Jan 6) Volkswagen shares up 12%.)

On Monday Porsche purchased for 6.1 billion euros Volkswagen shares and VW shares still closed down 1.7 percent.

If I would want to burn myself financially then I would hold on to VW shares.

Volkswagen shares closed on Monday at € 254.74.
– Société Générale analysts Eric-Alain Michelis and Philippe Barrier (23.12.08): “Sell” – VW target price € 130
– Deutsche Bank analyst Jochen Gehrke (17.12.08): “Sell” – VW target price € 70

“A Porsche spokesman confirmed that the sports car maker still planned to increase its stake in VW to 75 percent at some point this year.” I would not bet on that because 2009 will be a catastrophe.

Consider that this economic crisis will get much, much worse. Porsche shares PSHG_p.DE will continue to go down. The small rally in the stock markets will be short-lived because it is based on ‘hope’, ‘believe’ and devastating stimulus packages. Keynesianism is so outdated and wrong.

The US economy will go into a dramatic depression and China will have big problems because of that.
The EU economy already is in trouble and a failing US dollar, economy and government will not make things much better. Who will be able to buy cars then?

Car sales have already dropped tremendously and will continue to do so everywhere. People will just not be able to buy a ‘Golf’ or even a ‘Polo’ in the future – not to mention a Porsche 911.

Afterwards everyone will say that this observation was obvious. It is.

Source: Reuters

FRANKFURT (Reuters) – Germany’s Porsche Automobil Holding SE (PSHG_p.DE) has raised its stake in Volkswagen (VOWG.DE) to more than 50 percent, triggering a mandatory takeover offer for Sweden’s Scania AB (SCVb.ST) as a result.

Porsche’s purchase of further ordinary shares in Volkswagen means it now holds a 50.76 percent stake, Porsche said on Monday. It held 42.6 percent previously.

The additional stake of 8.16 percent was worth about 6.1 billion euros ($8.49 billion) on the stock market on Monday, according to Reuters calculations, considering that Volkswagen shares closed at 254.74 euros, down 1.7 percent.

Read morePorsche raises stake in VW to over 50 percent

German car downturn worst ever

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The trade body warns that car production will have to be cut

The downturn in the German car market is “at a pace and magnitude that has never happened before”, the country’s main auto trade body has warned.

As a result, the German Association of the Automotive Industry said new car sales in 2009 are expected to be the worst since reunification in 1990.

It added that Volkswagen, Daimler and Porsche will all have to cut output, which will “impact” on workers.

Last week Porsche delayed its takeover of Volkswagen, blaming falling sales.

Porsche said there were signs of a “serious slump” in global demand.

Challenging

Volkswagen itself has warned that the current sales environment is “difficult”, while Daimler, owner of Mercedes-Benz, said the situation is “very challenging indeed”.

German car sales are expected to slip to 2.9 million next year, down from the expected 3.1 million for 2008, says the trade body.

Car sales are also lower across Europe, with Italy’s Fiat warning that its 2009 profits could fall by 65%.

Read moreGerman car downturn worst ever

German carmakers: Sales collapse

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Car sales in the US collapse:

November Auto Sales: Porsche sales drop by half (Source: Forbes)

November Auto Sales: Daimler AG’s sales decline (Source: Forbes):
Total sales at Daimler’s U.S. operations fell 29.9 percent to 15,991 from 22,819 in November 2007
Sales of Mercedes-Benz brand vehicles last month declined 38.2 percent to 14,102 while the company sold 1,889 of its two-seater Smart models. Smart was introduced to the North American market in mid-January of this year.
Mercedes-Benz USA said its best-selling model family, the C-Class, had a 36.1 percent drop-off in sales, and E-Class sales fell by 49.3 percent.

November Auto Sales: BMW sales fall 26.8 percent (Source: Forbes)

Volkswagen November U.S. Sales Fall 19% on Economy (Source: Bloomberg)

Audi U.S. November sales fall 25.4% (Source: Market Watch)
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Berlin under fire as German car sales collapse

German car sales have plunged to the lowest level since reunification almost twenty years ago, increasing pressure on Chancellor Angela Merkel to abandon budget restraint and back plans for an EU-wide rescue package.

Registrations fell 18pc in November, led by a drop of 36pc in Opel sales. “The crisis has again worsened dramatically,” said Volker Lange, of the VDIK motor vehicle association.

Volkswagen is to suspend production at its Wolfsburg headquarters this month. BMW has cut output in Leipsig to one day a week and Porsche is shuttering its Stuttgart plant for a week. It is just as bad in France where PSA Peugeot Citroen is halting production for a month at Sochaux, the country’s biggest industrial site.

The slump in Germany’s core industry has led to vocal criticism of the Left-Right coalition government. The Handelsbatt newspaper warned this week that the coalition faces a “rebellion” unless it faces up to the gravity of the crisis.

Read moreGerman carmakers: Sales collapse

Billionaire Merckle Still Without Bridge Loan as Deadline Nears

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Related article: Billionaire Merckle Said to Need as Much as EU1.1 Billion

Dec. 1 (Bloomberg) — Germany’s Merckle family, with less than 24 hours to rescue the VEM Vermoegensverwaltung GmbH investment unit, hasn’t obtained bridge loans that would save the company.

“Negotiations are continuing,” said Doris Feinle, a VEM spokeswoman, by telephone today. She declined to comment on the timing or likelihood of an agreement.

The Merckle family, battered by wrong-way bets on Volkswagen AG shares and plunging stock markets, has until tomorrow to arrange short-term loans after a group of banks signed a so-called standstill agreement blocking them from making claims. A failure may have repercussions for an empire spanning the cement, machinery and pharmaceuticals industries.

Adolf Merckle, 74, the head of the family, won a two-week stay Nov. 20 after giving personal guarantees from his $9.2 billion fortune to the banks to try to get funding, three people familiar with the situation said at the time. VEM lost “low three-digit million euros” on VW stock, and banks demanded more guarantees from the company after shares used as loan collateral declined in value, the investment unit said at the time.

Read moreBillionaire Merckle Still Without Bridge Loan as Deadline Nears

Porsche to Shutter Plant for 7 Days as Car Sales Fall; Volkswagen Shares Down 22,66%

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By the way Volkswagen shares declined 22,66% today.

Last month, Porsche surprised the world by announcing it had acquired a nearly 43% stake in Volkswagen with an option to buy 32% more. Without anybody noticing, ‘wee little’ Porsche, maker of scarcely 100,000 cars a year, had cornered a 75% position in VW, which cranks out nearly 6 million vehicles. Source: Los Angeles Times
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Porsche Panamera

Nov. 25 (Bloomberg) — Porsche SE, the maker of the 911 sports car, said it will suspend production at its main plant for seven days to help cope with dwindling auto sales.

Porsche fell the most in a month in Frankfurt trading after the company said today it will idle the factory in Stuttgart, where it is based. Production was also halted for one day last week, the carmaker said in a statement, without specifying on which days the other closures will fall.

“I don’t think that Porsche’s customers have suddenly fallen into poverty, but they’re reacting to the fact that it may be inappropriate to pull up in a new Porsche when their neighbor’s house is being foreclosed,” said Christoph Stuermer, a Frankfurt-based analyst with research firm IHS Global Insight. “It’s an appropriate reaction.”

Read morePorsche to Shutter Plant for 7 Days as Car Sales Fall; Volkswagen Shares Down 22,66%

Billionaire Merckle Said to Need as Much as EU1.1 Billion

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Nov. 18 (Bloomberg) — Germany’s billionaire Merckle family, stung by losses on Volkswagen AG shares, needs as much as 1.1 billion euros ($1.4 billion) in financing to avert insolvency of its investment company, four people familiar with the situation said.

The family’s investment company VEM Vermoegensverwaltung GmbH may be forced to file for insolvency if a so-called standstill agreement that would freeze banks’ claims isn’t extended before today’s deadline, said the people, who declined to be identified because the talks are private. Merckle needs between 600 million euros and 1.1 billion euros, the people said.

Adolf Merckle, 74, whose estimated $9.2 billion fortune puts him 94th on Forbes’ list of the world’s richest people this year, needs financing after losing as much as 700 million euros on wrong-way bets on VW stock and the value of HeidelbergCement AG, which it owns, plunged, the people said. A failure of VEM could have repercussions for Merckle’s holdings, which span as many as 30 companies in the cement, machinery and pharmaceutical industries, said the people.

Read moreBillionaire Merckle Said to Need as Much as EU1.1 Billion

Volkswagen May Face DAX Ouster as Deutsche Boerse Changes Rules

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Oct. 31 (Bloomberg) — Volkswagen AG’s common shares may face removal from Germany’s DAX Index as early as next week after the benchmark’s compiler changed inclusion rules to stem disruptions spurred by gyrations in the automaker’s stock.

Deutsche Boerse AG, operator of the Frankfurt stock exchange, said in a statement today that from Nov. 3 it may at any time remove a DAX stock whose weighting exceeds 10 percent and whose share price over the preceding 30 trading days had annualized volatility of more than 250 percent.

“The exchange wants to guard that indexes are reliable and not exposed to these unusual swings,” said Carlos Sanchez, a sales trader at Interdin Bolsa SVB SA in Madrid. “It would seem like Volkswagen common shares are on the way out.”

Volkswagen’s weighting will be cut to 10 percent at the end of trading today and may increase next week if the shares outperform the benchmark. The stock’s volatility has climbed to about 395 percent in the past 30 days, Bloomberg data show.

Read moreVolkswagen May Face DAX Ouster as Deutsche Boerse Changes Rules

Volkswagen shares halve as funds lose billions

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Volkswagen (VW) shares continued their rollercoaster ride today when they nearly halved in value after the German authorities took action to prevent the volatility in the carmaker’s stock from destabilising the German market.

VW briefly became the world’s most valuable company yesterday, worth £238 billion, following panic share buying by hedge fund chiefs.

The hedge funds were trying to cover potential losses after placing huge bets that Volkswagen shares would fall.

But Porsche, the sports car giant, had been secretly building a 74 per cent stake in its rival, the world’s third-largest carmaker. Porsche said this morning that it would take steps to smooth VW’s soaring share price by settling hedging transactions, equivalent to 5 per cent of the company’s stock, but the move has come too late for some of the world’s most aggressive hedge funds, which are facing losses that could amount to between €20 billion (£15.9 billion) and €30 billion.

Today the shares fell €416.9 to €528.09 in morning trade.

Hedge fund experts believe the losses could even bring down some smaller funds, which have been caught out by the sudden price move.

Two days of frantic trading have led to what is thought to be one of the heaviest losses on a single company’s shares taken by hedge funds.

“This is without question the biggest single loss on a single stock in the history of hedge funds. It’s a bloodbath,” Laurie Pinto, a broker at North Square Capital, said.

Other shareholders in VW rounded on Porsche, saying that it had manipulated VW shares in an irresponsible manner. Porsche vehemently rejected the accusation of share-price manipulation.

Read moreVolkswagen shares halve as funds lose billions

Volkswagen shares soar again, up 93 percent

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FRANKFURT, Germany

Shares of Volkswagen AG jumped an eye-popping 93 percent on Tuesday after a similar surge the day before. Speculation on the reason centered on hedge funds needing to unwind bad bets on the share’s direction.

The immediate rise in VW share value — at one point, its market capitalization made it more valuable than Exxon Corp. — prompted German regulators to declare they were looking into the reasons for the explosive growth.

The surge came amid reports that hedge funds had been forced to buy scarce shares at high prices after mistakenly betting the shares would fall.

But with Porsche now holding nearly 43 percent of the company, and options to reach 75 percent by next year, that left a shortage of shares. If investors had shorted the stock by selling borrowed shares, they would need to buy shares in order to complete the deal.

On Sunday, Porsche Automobile Holding SE, which owns the company that makes the 911, Cayenne and upcoming Panamera sedan, said it increased its stake in VW to nearly 43 percent plus options, with an eye toward 50 percent by the end of 2008.

That started pushing VW shares into the stratosphere. On Monday, they were up nearly 147 percent to close at 520 euros ($651.35) compared with Friday’s closing price of 210.85 euros ($264.41).

On Tuesday, Wolfsburg-based Volkswagen’s shares spiked as high as 1,005 euros ($1,256) in Frankfurt trading Tuesday, nearly doubling Monday’s close. At that level, Volkswagen was worth some 296 billion euros ($370.8 billion), greater than Exxon’s market cap of $343 billion.

They later settled back to close at 945 euros ($1,183.70) — a gain of 81.7 percent. Some 12.3 million shares traded hands Tuesday.

Read moreVolkswagen shares soar again, up 93 percent

Volkswagen: Shares drop sharply; To cut up to 25,000 temp jobs -paper

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(For your information only. This is not an investment advice.)

I have been been closely watching Volkswagen shares in the last two weeks.

On Oct. 16 the premium for Volkswagen put options was skyrocketing.

In the past five trading days the VW stock has lost over 42%.

Today’s closing price was € 229,00.

Analyst expectations:

Goldman Sachs Group Inc.: Volkswagen new target price € 90 (Before € 206)
17.10.2008; Source: News (c) finanzen.net.

UBS: Volkswagen sell; Volkswagen new target price € 130
20.10.2008; Source: News (c) finanzen.net.

Sal. Oppenheim jr. & Cie. KGaA: New Fair value € 90 (Before € 125)
22.10.2008; Source: News (c) finanzen.net.

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Volkswagen to cut up to 25,000 temp jobs -paper

FRANKFURT, Oct 23 (Reuters) – Volkswagen plans to cut a majority or all of its 25,000 temporary staff as a response to rapidly deteriorating conditions in the market, Germany’s Frankfurter Allgemeine Zeitung reported on Thursday.

“We cannot avoid hard cuts,” Chief Executive Martin Winterkorn was quoted by the paper as saying in front of 500 managers in the company’s hometown of Wolfsburg.

A spokesman for Volkswagen said no decision had yet been taken.

“Both statements are wrong,” he said, referring to the paper’s report that a majority or all 25,000 would go, without commenting further.

Read moreVolkswagen: Shares drop sharply; To cut up to 25,000 temp jobs -paper

Volkswagen Falls Most Since 1989 on Short-Selling

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Oct. 20 (Bloomberg) — Volkswagen AG fell the most in almost two decades, counter to a rising German market, as investors short-sold the shares on speculation that the price will decline once Porsche SE gains control of Europe’s biggest carmaker.

Volkswagen’s common shares fell 80.91 euros, or 23 percent, to 277.09 euros, the biggest decline since at least January 1989. The preferred shares lost 3.85 euros, or 5 percent, to 73.10 euros. Short-sellers borrow stock on expectations they can repurchase the shares later at a lower price.

“VW is completely caught in a short-selling frenzy,” said Juergen Pieper, a Frankfurt-based analyst at Bankhaus Metzler who recommends selling the stock. “The share price has been detached from reality for at least six months. These erratic moves lack any fundamental explanation.”

Common shares in Volkswagen have surged 78 percent this year, helped by a 27 percent increase on Sept. 18 when investors bought stock to stem losses on their short-selling strategy. The Sept. 15 collapse of Lehman Brothers Holdings Inc., which lent Volkswagen shares to short-sellers, helped trigger the so-called short-squeeze by forcing the original owners of the stock to buy new shares, people familiar with securities lending said earlier this month.

About 15 percent of Wolfsburg, Germany-based Volkswagen’s common shares as of last month were lent, mostly for short-sales, according to London-based research firm Data Explorers. That was the highest proportion of any company on Germany’s 30-member benchmark DAX Index.

Read moreVolkswagen Falls Most Since 1989 on Short-Selling

Germany’s Car Industry Crashes

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For years, Germany Inc.’s best promotional vehicles have been the world-class luxury cars the country produces. Shiny Audi, BMW and Mercedes-Benz cars are like mobile billboards for excellence, from New York to Moscow, Buenos Aires to Shanghai.

But as the global financial crisis begins to take its toll on the real economy, Germany’s export machine has hit a wall. German exports fell 2.5% in August, the sharpest fall since 2003, as consumers and companies around the world cancel orders for everything from high-end industrial equipment to chemicals.

The car industry, still Germany’s biggest employer, is the worst hit. High gas prices in key markets such as the U.S. have slowed sales for months. Some consumers have been waiting for more fuel-efficient models, while many more are now delaying new purchases because of uncertainty over their jobs. Thanks to the credit crunch, even people who want to buy are finding finance has dried up.

All that spells trouble for the likes of BMW, Mercedes Benz, Porsche, Volkswagen, Ford Europe and General Motors’ Europe arm, Opel. Ferdinand Dudenhoffer, a respected industry analyst, predicts that the number of new German cars delivered to customers in 2008 will fall by at least 100,000 units to around 3.1 million, and will likely slip below three million next year. As a result, he says, German car companies will have to cut up to 20,000 jobs over the coming year.

Read moreGermany’s Car Industry Crashes