Jump to content
Sign in to follow this  
NewsFeeder

Report: Investment funds suing Porsche in U.S. for "short squeeze" fraud over VW

Recommended Posts

Filed under: Government/Legal, Porsche, Volkswagen, Earnings/Financials

porsche-logo-laydown-630-2.jpg

The Porsche-as-hedge-fund escapade isn't fully resolved yet. Of course, the biggest denouement will be when Volkswagen finishes integrating the company early next year, but in the meantime, Porsche is still dealing with investor wrath after its stock market foray. A group of U.S.-based hedge funds is suing the Stuttgart carmaker for losses in excess of a billion dollars, claiming those losses came because Porsche misled them about its intent.

Porsche was coy about its stake in VW, and only disclosed its stock holdings in the company as required by German law. German law doesn't require a company to publicly declare cash-settled stock options as a share in the company. That means Porsche was sitting on shares it controlled that investors didn't know about, and investors read Porsche's statements on its intent as not having any interest in taking over VW. This, even though the company was knocking down doors all over Europe trying to get the VW law repealed...

When the extent of Porsche's holdings were found out, investors expecting VW's stock to drop had to cover their short positions buy buying a much smaller supply of stocks than expected, which drove VW's share price to intergalactic levels. And that's where the massive financial bloodletting happened. Porsche was already investigated and cleared by German authorities, who found that the company didn't break any disclosure laws. Redress in an American court, where the lawsuit was filed, could be just as difficult to come by.

[source: Automotive News - sub. req'd | Image: Basheertome - C.C. License 2.0]

Report: Investment funds suing Porsche in U.S. for "short squeeze" fraud over VW originally appeared on Autoblog on Thu, 28 Jan 2010 10:58:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments

di
di

autoblog?i=A4rscxB-Rek:AaaT4SazQFY:wF9xT autoblog?i=A4rscxB-Rek:AaaT4SazQFY:V_sGL
A4rscxB-Rek

View the full article

Share this post


Link to post
Share on other sites

Your content will need to be approved by a moderator

Guest
You are commenting as a guest. If you have an account, please sign in.
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoticons maximum are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Sign in to follow this  



  • Today's Birthdays

    No users celebrating today.
  • My Clubs

  • Who's Online (See full list)

    There are no registered users currently online

About us

CheersandGears.com - Founded 2001

We  Cars

Get in touch

Follow us

Recent tweets

facebook

×