Investors switch into Porsche from VW on debut day

MILAN — Porsche AG shares rallied on their Frankfurt market debut on Thursday as traders dumped holdings of its controlling companies to grab a slice in the newly listed supercar manufacturer.

The listing of Porsche AG, under a trading code that includes the 911 number in a nod to its most famous model, defied turbulent markets to give the car brand a value north of 75 billion euros ($72.78 billion).

Traders said some investors that bought Volkswagen and Porsche SE to play a potential IPO boom might be unwinding their positions and switching into Porsche AG, which was trading not too far from the offer price.

“There seem to be shifts from Volkswagen into Porsche AG,” said Jochen Stanzl, analyst at online broker CMC Markets. “The sports car maker is seen by some as a luxury goods manufacturer and therefore valued higher than an industrial group.”

Porsche AG shares traded at a premium of as much as 5.2% to their IPO price of 82.5 euros at one point. They were last at 84.88 euros. Shares in top shareholders Volkswagen and Porsche Automobil Holding SE were last down 5% and 8% respectively.

“We are very positive about the first price. Of course we had a gut feeling — the feedback we got from investors was very positive,” Porsche AG Chief Executive Oliver Blume said, speaking next to a Porsche Taycan parked outside the Frankfurt stock exchange.

Porsche AG’s solid market debut came despite broadly weaker stock markets following red-hot German inflation data.

In an interview with Reuters, Blume brushed aside concerns about his dual CEO role as head of the newly independent sports car maker and the Volkswagen Group, saying it was not unusual to lead a brand and a company simultaneously. Some investors have said holding both jobs could create conflicts of interest.

“We made this decision very consciously — there is no time horizon in which it will be re-evaluated,” he said.

Though Porsche AG is targeting 80% electric vehicle production by 2030, Blume denied it was heading towards being a pure-play electric vehicle carmaker, a category that has traditionally done better on stock market lists.

“We have a very flexible strategy — we offer combustion engine cars, hybrids, and electric cars … this mix is what defines Porsche,” he said.

Analyst have said that Porsche AG has the potential to join Germany’s large-cap DAX index, which could attract demand for its shares from passive funds that adjust their portfolios to reflect benchmark indices.

Porsche AG was by far the most traded stock by volume on Thursday on Lang & Schwartz’s platform, indicating interest from individual investors, too.

(Reporting by Danilo Masoni in MilanAdditional reporting by Hakan Ersen in FrankfurtEditing by Amanda Cooper and David Goodman)

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