While most carmakers are having a difficult time making money from car sales, sports carmaker Porsche SE is raking in profits by playing the market. Porsche revved up its first half with €6.8 billion ($9 billion) in windfall profits from the sale of its share options in Volkswagen AG, allowing the carmaker to report a pretax profit that was more than twice its revenue.
According to
Reuters:
"Late in October, news that Porsche had secured access to about 74 per cent of VW ordinary shares -- draining the company of almost its entire freefloat -- led the stock to quintuple within 48 hours to €1,000 per share, briefly making the Wolfsburg carmaker the most valuable company in the world.
"Porsche then sold a small package of VW cash-settled call options to relieve buying pressure, sparking outcries from investors such as Deutsche Bank's German retail fund business DWS that the carmaker had manipulated the market and broken securities trading laws. ... The results cemented Porsche's reputation as a black-box
hedge fund with a captive auto business."
Unfortunately for the company's critics, German securities regulators haven't found any wrong doing on Porsche's part ... just some smart trading. -
George White
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