Spin

Volkswagen hopes to take Porsche public at $85B as “spin offerings” gain traction

Thursday, September 8, 2022 by Robinhood Snacks |
Porsche wants its own lane (Martyn Lucy/Getty Images)

Porsche wants its own lane (Martyn Lucy/Getty Images)

Cayman, top down… Porsche is speeding toward an IPO despite a bumpy market. On Tuesday, Porsche parent Volkswagen said it plans to take the luxe-car brand public within weeks, in what could be Europe’s biggest IPO since 1999. VW could raise $10B in the listing, and plans to use the cash to boost EV production (think: electric Jettas).

  • Big splash: At the high end of forecasts, Porsche could be worth $85B (almost equal to VW’s market cap). VW plans to keep a 75% stake in the biz.
  • Fat margins: Pricey Porsche has long been a profit puppy for VW: last year it accounted for 3% of VW’s car sales but half of its pretax profits.
  • “Supremium” surge: Luxury whips like Ferrari and Volkswagen’s Bentley are booming. New cars from brands like BMW and Tesla made up a record 17% of total US car sales in June.

IPOs take a back seat… as shaky markets scare off investors. So far this year there’ve been half as many IPOs as there were by the same time last year — and they’ve raised 70% less. But some have found success by going smaller, not bigger. In the past year:

THE TAKEAWAY

It’s the era of “spin offerings”… public offerings that spin off from larger companies. Porsche’s planned debut shows IPOs aren’t disappearing — they’re just changing. Buzzy unicorn-style IPOs (think: rapid growth, steep losses) are getting scrapped as econ jitters grow. Just the latest: Chobani. But corporate staples like VW and GE could continue spinning off profitable brands to boost value.