Volkswagen (OTCPK:VWAGY) rose some 3% Thursday on the Frankfurt Stock Exchange on a report that the German automaker is considering spinning off Porsche in the medium term through an initial public offering potentially worth up to $30.2B.
German publication Manager Magazin cited unnamed “Volkswagen insiders” as saying the company could list as much as 25% of Porsche on markets as a separate company, valuing the stake at 20B euros to 25B euros ($24.2B to $30.2B).
However, the publication also quoted an unnamed top VW manager as saying “at least it won’t be anything” this year. Similar reports surfaced in 2018 that the automaker planned to spin off Porsche through an IPO, but the company denied the speculation at the time and nothing ever came of it.
Still, Manager Magazin said that VW is under pressure to raise money to convert its gas-powered offerings to electric power instead. The publication said company chief Herbert Diess is dissatisfied with VW’s roughly $109B market cap compared to a $766B valuation for all-electric rival Tesla (NASDAQ:TSLA).
One analyst told the magazine that VW needs electric vehicles to make up 70% of its offerings by 2030, but that the company has only talked of getting to the 50% mark.
Volkswagen operates the Porsche brand under an agreement with a separate company called Porsche Automobil Holding (OTCPK:POAHY), which owns a majority VW stake in exchange. POAHY also owns some auto-technology companies.
As for VW, the stock has performed well recently, rising some 10% in recent weeks even before Thursday's news. (See chart below.)
Seeking Alpha contributor Keith Williams recently did a deep dive into Volkswagen’s electrification efforts vs. Toyota’s.
