Volkswagen May Spin Off Iconic Sports-Car Brand In IPO: Report
A Porsche IPO may be in the cards as Volkswagen (VWAGY) mulls listing the sports-car unit, five years after Stellantis (STLA), formerly Fiat Chrysler, spun off Ferrari (RACE) and watched Ferrari stock soar.
Volkswagen is considering listing its Porsche luxury car unit in a deal that could boost its valuation and bring in a vast amount of cash, sources told Bloomberg.
Meanwhile, the German auto giant is speaking with advisors about a potential initial public offering or spinoff of Porsche, the report added. Volkswagen could use any proceeds for acquisitions or technology investments as it pivots to manufacturing electric cars.
A Porsche IPO could happen as early as next year, the report said. Additionally, Volkswagen plans to keep a majority stake if it lists the unit.
However, Volkswagen declined to comment to Bloomberg. A German magazine earlier reported the potential Porsche listing.
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Volkswagen Stock Falls Amid Porsche IPO Report
Shares rose 3.75% to 22.83 in Thursday's stock market, hitting a three-year high. Volkswagen stock's RS line is at a 52-week high, according to MarketSmith chart analysis. Ferrari shed 0.2%, trading under the 50-day line, and Stellantis rose 0.8%.
Volkswagen's reported interest in a Porsche listing to boost its valuation or raise cash echoes the Ferrari IPO masterminded by former Fiat Chrysler chief, the late Sergio Marchionne.
And in Oct. 2015, Ferrari stock priced at $52 a share in its stock market debut, at the top end of the expected range. During the Ferrari IPO roadshow, Marchionne famously pitched the sports-car unit as a luxury brand, akin to a Birkin bag from Hermes, rather than an automaker.
Volkswagen CEO Herbert Diess is said to bemoan soaring valuations for Tesla (TSLA) and new EV stocks such as Nio (NIO) while legacy automakers lag.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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