The extraordinary news that Volkswagen briefly became the world’s most valuable may have been at least partially resolved by Volkswagen’s parent company Porsche.
The BBC reported that the value of Volkswagen share rose by 348 per cent over Monday and Tuesday after it emerged that only 5 per cent of Volkswagen shares were available.
The consequential impact on hedge funds which bet that shares would fall, were left in desperate need to buy shares in VW to make a profit. VW shares did indeed fall yesterday by 37 per cent.
Porsche made a statement to confirm that it was aware that speculative short sellers had to buy Volkswagen ordinary shares in order to fulfil their delivery obligations and that in the very recent past, this resulted in a massive increase in the stock exchange price of the Volkswagen shares, which at one stage exceeded Euro 1,000 per Volkswagen ordinary share.
In order to avoid further market distortions and the resulting consequences for those involved, Porsche SE states that it intends – depending on the state of the market – to settle hedging transactions in the amount of up to five per cent of the Volkswagen ordinary shares. This may result in an increase in the liquidity of the Volkswagen ordinary shares.
Porsche also denied all responsibility for these market distortions and for the resulting risks to which the short sellers have exposed themselves, while maintaining that they do indeed intend to increase its stake in Volkswagen to up to 75 per cent.
