How Porsche Hacked the Financial System and Made a Killing
01-08-2009, 11:38 PM
#1
Senior Moderator
Thread Starter
How Porsche Hacked the Financial System and Made a Killing
01-10-2009, 03:56 PM
#3
I feel the need...
Sad story, but it's surprising that he would allow a single position grow large enough to destroy him. Of course, given the recent Madoff scandal, nothing surprises me anymore.
01-10-2009, 04:33 PM
#4
Needs more Lemon Pledge
Wow, interesting read.
Trending Topics
01-11-2009, 07:17 AM
#8
Burning Brakes
Join Date: Dec 2004
Location: Boston MA
Age: 44
Posts: 1,078
Likes: 0
Received 0 Likes
on
0 Posts
at the time I was really confused (not having read all the details) as to how ppl could be buying volkswagen like crazy instead of either doing nothing, or shorting it (as there's no way its market cap was a realistic representation of its value).
Now I know. I'm glad for Porsche. They outsmarted the hedge funds at their own game. And they didn't do anything illegal (its not illegal to simply buy another company's stock...In the US there's rules like if you own more than 5%, you have to disclose your ownership...But this was in Germany).
And in fact, the hedge funds caused their own squeeze by panicing.
The only unethical piece would be if Porsche was loaning out the shares to be shorted (and then buying them back up again making it impossible for the borrowers to return the stock).
Now I know. I'm glad for Porsche. They outsmarted the hedge funds at their own game. And they didn't do anything illegal (its not illegal to simply buy another company's stock...In the US there's rules like if you own more than 5%, you have to disclose your ownership...But this was in Germany).
And in fact, the hedge funds caused their own squeeze by panicing.
The only unethical piece would be if Porsche was loaning out the shares to be shorted (and then buying them back up again making it impossible for the borrowers to return the stock).
01-13-2009, 03:02 PM
#12
Read about this on another forum a few days ago... very interesting indeed.
edit: more info: http://news.yahoo.com/s/afp/20090106...eoverporschevw
edit: more info: http://news.yahoo.com/s/afp/20090106...eoverporschevw
Last edited by v6cord2k5; 01-13-2009 at 03:06 PM.
01-18-2009, 01:34 PM
#18
trees grow in
The term "hacked" is perhaps slightly biased? I think it is more of how Porsche applied the simple law of "Supply and Demand" to the correct situation. People are greedy (obv. including Porsche), but when you are willing the risk to gamble, you should also willing the risk to lose everything.
01-18-2009, 02:40 PM
#19
Suzuka Master
Join Date: May 2001
Location: PA
Posts: 5,773
Likes: 0
Received 0 Likes
on
0 Posts
Shorting is always a gamble, moreso than long. This is also a very rare situation. At the time it happened as well the market sentiment was pessimistic and shorting was very prevalent.
05-26-2009, 06:33 PM
#20
I feel the need...
Porsche’s $24 Billion Options Gain at Risk in VW Bid
Porsche SE, struggling to combine with Volkswagen AG, is in danger of losing some of the 17.3 billion euros ($24.3 billion) in profits recorded from holding VW options because it may not have the money to exercise them.
Porsche bought options and Volkswagen stock for more than three years and controls more than 70 percent of Europe’s biggest automaker. Now, Stuttgart, Germany-based Porsche may be unable to raise the money needed to cash in the options, according to research by Sanford C. Bernstein & Co., Sal. Oppenheim jr. & Cie. and FAIResearch GmbH & Co.
The 78-year-old maker of the 911 sports car piled up more than 9 billion euros in debt and hasn’t been able to raise the financing even after the options contracts surged in value along with the sevenfold gain in VW shares since 2005, according to the analysts. Porsche is attempting to negotiate a merger with Volkswagen and seek an investor to provide cash after its bid last year fell apart when VW’s home state of Lower Saxony vetoed the proposal and its car deliveries fell 27 percent in the six months ended Jan. 31.
“The smartest guys in the room are running out of options,” Max Warburton, a London-based analyst at Bernstein, said in an e-mailed message May 19. “We no longer believe Porsche is in a position to control the VW share price and are increasingly convinced that the VW ordinary shares will collapse.....”
Porsche bought options and Volkswagen stock for more than three years and controls more than 70 percent of Europe’s biggest automaker. Now, Stuttgart, Germany-based Porsche may be unable to raise the money needed to cash in the options, according to research by Sanford C. Bernstein & Co., Sal. Oppenheim jr. & Cie. and FAIResearch GmbH & Co.
The 78-year-old maker of the 911 sports car piled up more than 9 billion euros in debt and hasn’t been able to raise the financing even after the options contracts surged in value along with the sevenfold gain in VW shares since 2005, according to the analysts. Porsche is attempting to negotiate a merger with Volkswagen and seek an investor to provide cash after its bid last year fell apart when VW’s home state of Lower Saxony vetoed the proposal and its car deliveries fell 27 percent in the six months ended Jan. 31.
“The smartest guys in the room are running out of options,” Max Warburton, a London-based analyst at Bernstein, said in an e-mailed message May 19. “We no longer believe Porsche is in a position to control the VW share price and are increasingly convinced that the VW ordinary shares will collapse.....”
Thread
Thread Starter
Forum
Replies
Last Post
Yumcha
Automotive News
4
09-15-2015 06:44 PM
Yumcha
Automotive News
2
09-04-2015 08:03 AM
