VW’s shares leap on Porsche move

Posted by admin on 27 October, 2008 under Business news | Be the First to Comment

Volkswagen has seen its shares almost double after sports car maker Porsche announced at the weekend that it had increased its stake in the company.

In early afternoon trade, VW’s shares were up 87.7% at 385.27 euros, having been up 98% earlier in the day.

Porsche said on Sunday it had lifted its stake in VW to 42.6% and intended to increase this to 75% in 2009.

The announcement led to a surge in VW’s share price as investors scrambled for the remaining VW shares on the market.

In its announcement on Sunday, Porsche reiterated its intention to increase its stake in VW above 50% by the end of the year.

It also announced that it had options to buy an additional 31.5% of VW.

The news led to VW’s share price almost doubling on Monday, as investors who had sold VW shares hoping to buy them back later at a lower price – known as short-selling – sought to lay their hands on VW stock.

The rush even lifted the DJ Stoxx European autos index by 31% at one stage, despite downbeat news from other car manufacturers such as Daimler Chrysler.

News reported by The BBC