If you were asked what is one of the sexier cars on the market? on the list you likely find Porsche. Porsche is wholly owned by Volkswagen, but the top shareholders believe if they take out Porsche from VW, the shares of Porsche would rise higher than VW.
In an article by Victoria Waldersee, Jan Schwartz, and Christopher Steitz of Reuters, VW is seriously considering bringing an IPO for Porsche. The IPO could be valued at $130 billion compared to the current market value of VW at $116 billion.
In 2009, VW acquired Porsche resulting in the Porsche and Piech families holding 31.4% of the shares in VW and 53% of the voting rights.
VW is considering list 25% of Porsche.
Linking to dividend paying stocks, all companies buy and sell companies for a wide variety of reasons and stock market theories, but in the end they are are trying to unlock shareholder value which they do not see reflect in the present shares. Sometimes the market likes conglomerates, sometimes it likes stand alone companies, at present the market like companies with some debt; if interest rates go towards 5% the markets will like companies will lower debt. There are many cycles in the markets and management has to pay attention to the cycles. It does not necessarily change the company, but highlights what it does and continues to do. As an investor you will see management making changes to reflect what the market wants, otherwise someone will begin to buy shares to unlock shareholder value.
There are more questions than answers, till the next time – to raising questions.