Amid fears of recession, tumbling stock prices and heightened market turmoil, the biggest market debut of the year is that of a carmaker whose vehicles can cost six digits.
Porsche, the 91-year-old German company behind iconic models like the 911, became the breakout star of the markets when it began trading on Thursday, in one of Europe’s largest initial public offerings ever.
Shares in Porsche rose 2% in their debut on the Frankfurt Stock Exchange, to 84 euros each, valuing the company at 77 billion euros, or $75 billion. That defied the broader decline in European market indexes on Thursday, including in Germany’s DAX.
The deal’s underwriters had priced the offering the night before at 82.50 euros, the top end of its expected range. By the market close on Thursday, trading was flat at 82.62 euros a share.
The stock offering is Porsche’s return to the public markets for the first time in a decade. The Volkswagen Group acquired the company after a failed attempt by Porsche in 2008 to buy the much larger German automaker, and it has become the standout in Volkswagen’s stable of brands.
The public portion of Porsche’s stock sale raised 9.4 billion euros for Volkswagen — or double the entirety of proceeds raised by initial offerings in Europe so far this year. The offering included several nods to Porche’s best-known model, the 911: Its total share count is 911 million, and its ticker symbol is P911.
At that size, Porsche’s debut trails only those of the Italian energy company Enel and Germany’s Deutsche Telekom in the rankings of European initial offerings, according to Refinitiv. And it is the largest IPO to be held on the continent since the turn of the millennium.
Executives at Volkswagen and their bankers have insisted that Porsche could buck the dismal trend for IPOs. In recent weeks, they have tried to convince prospective investors that the sports carmaker had healthy business prospects, with an operating margin of nearly 20%; a recognizable brand; well-heeled customers willing to spend on expensive cars regardless of economic conditions; and a strategy for moving into battery-powered vehicles, spearheaded by the Taycan sedan.
Volkswagen is planning to use about half the proceeds from the initial offering — which raised nearly 20 billion euros in total — to finance its shift to electric vehicles. The remainder will be paid out to Volkswagen’s shareholders.
This article originally appeared in The New York Times.
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