Back
~
1
min read
· Posted on
February 21, 2024

Porsche debuted on the share market last week and made an even better start than the late-90's Thorpedo

Porsche debuted on the share market last week and now it's the single biggest IPO in Europe in a decade.

What's the key learning?

  • Last week, Volkswagen listed a 12.5% stake in Porsche on the share market and raised over $9 billion USD - and now it is valued at around $73 billion USD.
  • The challenge for Volkswagen is that it is considered a 'low-growth company', and these companies are often valued at low-growth multiples of revenue or EBITDA.
  • Premium on car brands that have made progress on electrification have received much healthier multiples.

👉Background: Porsche is the German car maker that specialises in luxury sports cars, SUVs and sedans. Fun fact: Before this big IPO, Porsche was owned by none other than Volkswagen.

👉 What happened: Last week, Volkswagen listed a 12.5% stake in Porsche on the share market and managed to raise over $9 billion USD.

👉 What else: That means Porsche is now valued at around $73 billion USD, which marks the single biggest IPO in Europe in a decade.

What's the key learning?

💡Sometimes when you love someone, you need to let them go. The challenge for Volkswagen is that it is considered a 'low-growth company'. And these companies are often valued at low-growth multiples of revenue or EBITDA.

💡The problem here is that the low-growth multiples are applied across the whole company…even if it there is a high-growth part of the business. With Porsche stuck inside VW, it wasn't being valued properly.

💡Premium on car brands that have made progress on electrification have received much healthier multiples. Throw in Porsche’s cult-following and chunky profit margins and it makes sense why Porsche is trading so well.

‍

Ready to win at money?

Sign up for Flux and join 100,000 members of the Flux family

A button to App StoreGoogle Play store button
Excellent  4.9 out of 5
Star rating
No items found.