You didn't think Porsche wouldn't try drumming up hype for its IPO, now did you?
There is no Porsche without the 911. The Porsche 911 brought the company to where it is today, and apparently, Porsche will recognize that when the Porsche brand moves forward with its IPO. Porsche's website for the share placement shows that exactly 911 million Porsche AG shares will be sent out at the time of the offering.
Of course, that's a little nod to the iconic 911. Anticipation has been building around the German brand's IPO since it was announced. However, despite Porsche's cute nod to the 911, some analysts suggest the value of those punny shares may be a bit off.
Those 911 million shares will be split in two upon the IPO. 455.5 million preferred shares, along with 455.5 million ordinary shares, is how Porsche will split things, but only the preferred shares will be listed. Additionally, Porsche itself will be buying 25% plus one of its ordinary shares. Those'll be bought at a 7.5% premium compared to the preferred shares.
Still, it's unclear how much those shares will be worth. Porsche has said previously it hopes the valuation will come in as high as $85 billion. Market experts at HSBC Holdings told Bloomberg that Porsche is really only worth an estimated $44.4-57 billion.
Much of HSBC's reasoning behind this comes from the ramifications of supply chain shortages and coronavirus. Porsche has also suffered from setbacks due to Russia's invasion of Ukraine. While far from the worst part of that conflict, Porsche has been affected by it, along with the Volkswagen Group, Porsche's parent company. Of course, fears of a recession still linger, and Porsche's valuation could be affected by that, yet another reason for HSBC's hesitancy. Recently, the economy has seen a downward trend as supply lines falter across the globe. Still, Porsche presents a strong case when compared to other luxury automakers.
HSBC compared the brand to Ferrari, Mercedes-Benz, and BMW. However, some have argued that Ferrari is a rather unfair comparison, seeing as it sells far fewer and far more expensive vehicles. Porsche also shifted roughly 300,000 cars to Ferrari's 11,000 or so cars in 2021. Overall, HSBC is hesitant to recommend VW shares as a whole.
The firm downgraded its rating on VW shares from buy to hold. Ultimately, the IPO may affect how Porsche proceeds as a business. It is able to sell far more SUVs and EVs than sports cars, and a harsh IPO valuation may push the automaker towards more vehicles in those categories.