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Porsche makes market debut in Germany’s biggest IPO in over 25 years

The opening bell under a Porsche logo prior to its IPO
Oliver Blume, chief executive of Porsche, called the IPO a 'historic moment' as it looks to shift toward electric vehicles.. Photo: Kai Pfaffenbach/Reuters

Porsche (PAH3.DE) made its stock market debut in Frankfurt on Thursday following a spin-off from its parent company Volkswagen Group (VOW3.DE).

The listing is Germany’s biggest initial public offering (IPO) in over a quarter of a century, and the second largest in the country’s history after Deutsche Telekom (DTE.DE) in 1996.

Before its first day as a public company, the luxury car maker closed its books on Wednesday just above its final price of €82.50 (£73.77, $79.64) per share, which was at the top end of the range announced earlier this month. This gave Porsche a market cap of around €78bn.

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Oliver Blume, the company’s chief executive, called the IPO a “historic moment” as it looks to shift toward electric vehicles. By 2030 the group is aiming for 80% of its deliveries to be electric.

“Today, a big dream comes true for Porsche,” Blume said in a statement. “Our increased degree of autonomy puts us in a very good position to implement our ambitious goals in coming years.”

However, it has fallen from its debut price of €84, with early investors booking a loss thanks to market volatility and ongoing macroeconomic uncertainty.

Shares, which come without voting rights and remain closely tied to Volkswagen, are down 7.5% following their debut at the time of writing.

It comes as firms across continental Europe have raised the smallest amount this year since the 2009 global financial crisis at $44bn, of which only $4.5bn comes from IPOs, according to data from Refinitiv.

Victoria Scholar, head of investment at Interactive Investor said that Porsche is seen “as the crown jewel of the VW Group.”

“Porsche hopes this flotation will help to fund its shift towards battery technology and become as successful as Ferrari’s IPO in 2015. However there are concerns that Blume is spreading himself too thinly with a dual role as CEO of Porsche and the head of Volkswagen.”

Porsche 911 Sport Classic. Photo: Porsche
Porsche 911 Sport Classic. Photo: Porsche

Meanwhile, Laura Hoy, equity analyst at Hargreaves Lansdown, said: “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.

"Despite ongoing worries about a ballooning cost of living crisis, investors are standing behind the group’s proposition. Porsche caters to high-net-worth individuals, a population that’s unlikely to feel much of a sting from cost of living increases."

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She added: “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.”

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