Dividends and VW announces Porsche IPO plans, as investors question timing

In every portfolio an investor has something that they think is sexy and hopefully also profitable. If investors like cars and most do, then they want to own shares in the brand they either wish they own or would like to have. For sometime Tesla has been considered a sexy brand, but one brand that has been sexy or flashy for years is the Porsche.

In an article by Jan Schwartz and Emma-Victoria Farr of Reuters, Volkswagen or VW owns the Porsche brand and wants to have an Initial Public Offering or IPO of the company or it will spin it off. For VW, the Porsche brand is expect to have a valuation in the area of $78 to $111 billion. If it comes at the high end, it will be the largest in German history and the biggest in Europe since 1999.

Porsche’s status as a luxury brand able to raise prices makes it a money maker for the VW Group. Porsche’s operating profit jumped 22% as compared to the mass marketed oriented VW which was up 8%.

VW will decided to approve 25% plus one share of ordinary shares in Porsche AG to be sold to Porsche SE which would give the Porsche and Piech families a blocking minority.

Qatar Investment Authority which owns 10.5% of VW and 17% of its voting rights would be a strategic investor in Porsche AG preferred shares in the case of an IPO.

Linking to dividend paying stocks, there was a wonderful ad a number of years ago, the owner said I liked the product so much I bought the company. In this case if you like or love Porsche cars you can own shares. As a luxury brand it can raise prices and its loyal customer base will continue to buy and profits will be made. Expect the IPO to be over scribed.

There are more questions than answers, till the next time – to raising questions.


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