Porsche shares fall below IPO pricing

03 October 2022 - 14:57 By Reuters
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On Monday Porsche shares fell to €81 (about R1,423), 1.8% below the IPO pricing of €82.50 (about R1,450). At 11am GMT they were trading at €81.48 (about R1,432) per share, down 1.1%.
On Monday Porsche shares fell to €81 (about R1,423), 1.8% below the IPO pricing of €82.50 (about R1,450). At 11am GMT they were trading at €81.48 (about R1,432) per share, down 1.1%.
Image: Harold Cunningham/Getty Images

Shares in sports car brand Porsche fell below its listing price on Monday, the third day of trading since its $72bn (about R1.29-trillion) listing by parent company Volkswagen.

The closely watched initial public offering (IPO) was the largest listing in Germany in more than 25 years despite a backdrop of volatile global markets.

On Monday Porsche shares fell to €81 (about R1,423), 1.8% below the IPO pricing of €82.50 (about R1,450). At 11am GMT they were trading at €81.48 (about R1,432) per share, down 1.1%.

The wider market was also down, with the pan-European STOXX 600 index losing 0.6% while a sub-index of auto stocks fell by about 1.1%.

One banker involved in the Porsche IPO said while shares in the carmaker were down, they are doing well compared with much bigger drops on the wider market over the past three days.

Shares in Porsche avoided dropping below its IPO pricing for the first two days of trading on Thursday and Friday, closing flat at €82.50 both days.

A second banker involved in the deal said risk sentiment had probably taken over, explaining Monday's fall in Porsche shares.

Since the company made its debut, the wider car sector is down about 5.6% while shares in parent Volkswagen are down about 10%.

As standard in an IPO, the deal includes a so-called greenshoe option allowing a stabilisation manager to purchase shares in the market at the IPO price in the first 30 days after listing to help provide price stability.

The greenshoe option on Porche's IPO is equal to about 15% of the base offering, which will grow from €8.2bn (about R144.15bn) to €9.4bn (about R165,21bn) if the option is exercised fully. 


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