The €90 billion carmaker is mulling a listing of the Porsche division it has wholly owned since a major drama thirteen years ago reuters.com/article/us-vol…
It makes strategic sense as a significant way to bring in new Equity Cash, but might also be a source of fresh wrangling over price and control
The history is colourful
In 2007 Porsche’s then-parent group upped its VW stake in what looked like an effort to gain creeping control
Whatever the controlling Porsche-Piech family’s intentions, in 2008 it wound up sparking an epic short-squeeze of hedge funds who were betting against VW shares
Subsequent lawsuits and Porsche’s crushing debt pile eventually killed a plan for Porsche to merge with VW
Instead, VW ended up taking full control of the Porsche brand in 2012
Now we are in 2021, and surrendering some of VW’s ownership by way of a partial initial public offering could make some sense for Chief Executive Herbert Diess
His main task is to pivot the company from being an analogue maker of internal combustion engine-powered cars into a digitally-controlled electric-vehicle leader chasing Tesla as the clear market leader
A multibillion-euro Cash injection from listing a chunk of Porsche might help in the all-important quest to avoid ending up as just a glorified auto assembler
Yet the plan has echoes of the long-running VW-Porsche saga, in which valuing the Porsche brand proved very contentious
In recent years, Porsche’s finance chief has opined that the carmaker could be worth €70 billion, while Reuters reported on Thursday that some analysts value it as highly as €100 billion
Both look toppy
Such high numbers only work if you put Porsche’s potential 4.5 billion euros of operating profit in 2021 on the same 33 times multiple as Ferrari
But according to HSBC analysts, the Italian group’s higher-priced cars make it way more profitable
They assume a multiple of 10 times, which implies an Enterprise Value for Porsche of only 45 billion euros to Debt and Equity holders
Listing a quarter of that might still raise some necessary Cash
But both the valuation of Porsche and VW’s ability to sell it will depend on navigating its very unusual control and ownership structure
Trade unions and politicians control half the seats on the supervisory board, and the Porsche-Piech clan control 53% of VW voting rights with only 31% of the shares
Get ready for new dramas
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The semiconductor crunch that has battered the auto sector leaves carmakers with a stark choice: pay up, stock up or risk getting stuck on the sidelines as chipmakers focus on more lucrative business elsewhere reuters.com/article/us-aut…
Car manufacturers including Volkswagen, Ford and General Motors have cut output as the chip market was swept clean by makers of consumer electronics such as smartphones - the chip industry’s preferred customers because they buy more advanced, higher-margin chips
The semiconductor shortage - over $800 worth of silicon is packed into a modern electric vehicle - has exposed the disconnect between an auto industry spoilt by decades of just-in-time deliveries and an electronics industry supply chain it can no longer bend to its will
1. For every 100,000 cars that Tesla makes, all other Automakers need to make 400,000 BEVs and consume >20 GWh of Battery Supply
- please show me that production and that Battery Supply
2. For every +100,000 units of new capacity that Tesla adds, all other Automakers need to add +400,000 units of new BEV Capacity and +20 GWh of new Battery Supply Capacity
- please show me that new BEV Production Capacity and that new Battery Supply Capacity
3. Why does this matter - PART 1
- because if all other Automakers do not do this, they will lose Global Market Share to Tesla