Porsche: Pedal to the Metal Despite Dangerous Conditions

Written by: Laura Hoy | Hargreaves Lansdown

Porsche shares were priced at €82.50, the top end of the proposed range. With a market cap of around €78bn, it was the largest European IPO ever.

Early investors immediately booked a loss thanks to market volatility and ongoing macroeconomic uncertainty, as shares hit the market just shy of €70 and immediately began to slide.

The shares were down 4.1% following their debut.

Investors were keen to get into the driver’s seat at Luxury carmaker Porsche with shares issued at the top end of the proposed range. However once shares hit the open market they swallowed a loss as appetite for shares in Europe’s largest IPO in years was muted given the ongoing market turmoil and increasingly worrying macroeconomic data. Porsche’s unconventional management structure likely didn’t help matters—not only do the new shares come without voting rights, but Porsche remains closely tied to Volkswagen. The two have several major shareholders in common and share a single CEO, raising questions about whether the automaker is actually “going it alone.” 

Investors may come back to the table looking for a bargain eventually, though. The group caters to high-net-worth individuals, a population that’s unlikely to feel much of a sting from cost of living increases. That means cars priced in the triple digits will continue to see sales growth as their more affordable counterparts stagnate. There’s some debate over whether or not Porsche is actually “luxury” given its most popular model starts at around €66,000, but with an average selling price steadily rising into the triple digits, Porsche is well on its way to rubbing elbows with the highest-tier carmakers if it’s not there already. 

Electrification is a priority for Porsche, setting it apart from competitors who weren’t quite prepared for the shift toward EVs. By 2030 the group’s aiming for 80% of its deliveries to be electric, making it an attractive pick as electric cars continue to gain momentum.

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