Porsche’s cornering of VW shares was a huge mistake?
In October of last year, the economist wrote about Porsche’s “brilliantly conceived wealth transfer.” I wrote about it, too – it was amazing – they made Volkswagen the most valuable company in the world for a few days. I thought it was a very sharp move which fleeced hedge funds of billions and billions of dollars.
Now I read in the Telegraph that Porsche is on the brink of financial collapse, and this “brilliant” move of theirs last autumn was just a huge mistake?
Porsche acquired a 51pc share of VW earlier this year after a series of derivatives deals that tripled Porsche’s debt to €9bn.
The takeover bid went badly wrong, forcing Porsche chief Ferdinand Piech to press instead for a merger of the two car makers on increasingly less favourable terms.
Porsche’s travails are largely due to financial acrobatics, not falling sales.
These “financial acrobatics” not only cost Porsche and hedge funds billions, but contributed to Adolf Merckle’s suicide.
So who actually made the money here?
