Will Porsche hit the projected $85 billion for the stock offering?
Several automakers have gone public in recent years with stock IPOs (initial public offerings) to drum up cash and build value. Some recent examples include electric truck company Rivian and electric luxury automaker Polestar.
These IPOs have launched with mixed success, but according to a recent report from Bloomberg, Porsche hopes its IPO can exceed expectations.
After flirting with an earlier IPO valuation of $110 billion, the Porsche IPO has now reportedly attracted around $85 billion. While lower than the top projections, this would still be one of the largest listings ever for a European car company. Ferrari was only valued at around $9.8 billion when it launched an IPO in 2015, and Swedish automaker Volvo was around $18 billion.
The Porsche IPO has not officially been announced yet, as it still requires a supervisory board sign-off. An announcement will likely be made in Frankfurt, Germany in early September. Earlier reports claimed the IPO was postponed due to the conflict in Ukraine and potential doubts from Volkswagen Group investors. However, based on the latest information, those issues have been put to rest, and Porsche will move forward with its public plans.
Sources familiar with the deal (who asked to remain anonymous) told Bloomberg that Porsche has received more pre-orders for shares than what is available and that the German manufacturer is hoping for a valuation between 60 billion and 85 billion euros ($60-$85 billion USD).
Some big-name investors include the T Rowe Price Group and the Qatar Investment Authority. There are also a few interested billionaires such as Dietrich Mateschitz (founder of Red Bull) and Bernard Arnault (chairman of LVMH).
Porsche IPO investors will be sold shares that do not come with voting rights. At the same time, the Porsche and Piech families will reportedly receive a special dividend that will enable them to own a blocking minority stake in Porsche. This means that they will own less than 50% of the overall stock but can overturn decisions made by the voting majority.
The IPO will be led by Porsche CEO Oliver Blume, who recently replaced Herbert Diess as Volkswagen's CEO. Blume joined the VW Group in 1994 and has held management positions for several of the company's brands.
Porsche is counting on this IPO to bring in huge investments that will aid the company in its push toward electrification. If this goes as well as Rivian's IPO, we imagine investors will end up happy. The company already brings in vast revenue with successful sports cars like the newly-announced Porsche 911 GT3 RS. Still, the IPO could bring a helpful cash injection to expand and develop new products.