Home BUSINESS Porsche hits the market | The Economist

Porsche hits the market | The Economist

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Tthe powerful The rear-mounted engines of Porsche’s long line of 911 sports cars made them small and fast. At one corner, however, they acted like a pendulum, leaving some less skilled drivers parked in the roadside hedgerows. After an initial public offering (IPO) on September 29, the luxury automaker will also require nimble handling to ensure its strengths do not become a source of weakness.

In a nod to its most famous model, the IPO will comprise 911 million shares. Only 114 million, non-voting, will be sold to the public and big investors, including the Qatar Investment Authority. The rest will be in the hands of returnowner of Porsche since 2012, other returnThe largest shareholders of Porsche (yes, the same one) and the Piëch families. The listing could value Porsche at up to 75 billion euros ($74 billion), instantly making it the world’s fifth-largest automaker by market value (see chart).

Investors are dizzy at the prospect. Requests for shares reportedly surpassed the total offering of €9.4bn within hours of the announcement. IPO opening of the order book. return and Porsche may seem like a strange time for such a bold move. The auto industry faces uncertain times as supply chains break down and the global economy falters. On September 19, Ford warned that earnings in the third quarter could be less than half the $3 billion that analysts had forecast; its share price fell more than 12%. In recent weeks, Nio, Li Auto and Xpeng, among China’s most successful electric vehicles (maybe) startups, reported rising quarterly losses.

The derived strips return 100% owned by a stable wage earner. In 2021, the approximately 300,000 cars from Porsche, from return‘s total of 8.6 million, generated a quarter of the group’s operating profit. The brand has been able to add practical vehicles such as etc.s (which now make up three out of every five Porsches sold) to its range without giving up the air of exclusivity. It has been able to keep prices high in a segment that is growing faster than the industry as a whole. Porsche’s net margin of nearly 20% comfortably outperforms its premium rivals. It also means more resources to pursue ambitious maybe plans, according to which 80% of new Porsches will be battery-powered by 2030.

The structure of the IPO at least allow return to retain the right to a portion of Porsche’s future cash flows. For Porsche, the benefits of the fix are less obvious. Maintaining the ties was meant to allow Porsche and return they share some platform development and engineering costs, particularly software. But Caryad, returnthe digital drive is struggling; software delays have already forced Porsche to postpone the launch of its little e-Macan etc. for at least one year, until 2024.

Meanwhile, financial independence means Porsche can no longer rely on it. returnProfits from to bail it out should motorists ever fall out of love with its cars, or its margins are squeezed by the arrival of competitors at the pricier end of the luxury segment (which Mercedes-Benz is already evaluating). Investors, fasten your seat belts.

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