Porsche’s long-awaited initial public offering may arrive at a steep discount due to fears of recession, energy shortages, and the ongoing war in Ukraine.
The German automaker’s IPO has been in the works for quite some time and some bankers involved had valued it at more than €80 billion ($81.89 billion). However, two unnamed individuals involved in the listing claim that a large markdown may be required, noting that Porsche may need to settle for as little as €60 billion ($61 billion).
Reuters suggests that the current owners of Porsche have differing views on how much it is worth, while a separate source revealed that investors have yet to agree on a valuation formula. Porsche’s chief finance officer Lutz Meschke recently noted that the car manufacturer was “financially resilient” and that revenues in 2022 should rise to €38 billion ($38.69 billion), up from the €33 billion ($33.6 billion) of 2021, even though deliveries have fallen by 5 per cent.
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Bernstein Research says that Porsche could be valued at between €55 billion ($56 billion) and €100 billion ($101.8 billion), setting a fair value at roughly €75 billion ($76 billion) while noting that it is a “great company but not Ferrari.”
Reuters also spoke with a top-20 Volkswagen shareholder who wasn’t particularly keen on the IPO, noting that only a small amount of stock will be sold meaning new shareholders will have little influence.
Important bankers behind the deal will survey market conditions at the end of August with a final Porsche board decision to come after. Sources suggest that an IPO date on the Frankfurt Stock Exchange is likely towards the end of the third quarter or early in the fourth quarter.
A key motivator for Porsche to go public are its electric vehicle plans. The car manufacturer wants EVs to account for 80 per cent of its sales by 2030 and the funds generated by an IPO will help to finance this shift.
