Porsche earns $7.3 billion due to VW options

yeah, about that...... this has nothing to do with toyota and lexus. enough said. next!

— 1dott8 (View Profile)

Posted on 3/31/2009 4:34:14 PM | reply to this comment | Votes: 3   

Actually, Toyota makes $16.8 billion in 08. considering they sold roughly 8.4 million cars, and Porsche only sold fractions of that, I would say that Porsche is very profitable.

David, when you get to high school, you may learn about cost/unit and profitability...

— ThierryHenry14 (View Profile)

Posted on 4/1/2009 10:11:58 AM | reply to this comment | Votes: 2   

It was a series of smarter moves by Porsche, it seems. As investors wanted to cash-out of the automotive industry, Porsche was all too happy to purchase those seemingly declining shares.

They have made a powerplay for a controlling stake in VW and it's vast listing of subsidiaries; and it's paying off...in billions.

I'm sure a lot of people are scratching theirs heads on this one.

— dumpsty (View Profile)

Posted on 3/31/2009 5:04:16 PM | reply to this comment | Votes: 4   

Good job Porsche.

— DavidB5 (View Profile)

Posted on 3/31/2009 5:30:54 PM | reply to this comment | Votes: 3   

Porsche can own GM and Chrysler with the money they bring in.

— veyron1001 (View Profile)

Posted on 3/31/2009 7:29:24 PM | reply to this comment | Votes: 2   

Could not have happened to a nicer bunch. Porsche should have held on to all those shares and let the Hedge Funds Collapse for their stupidity.

Bloody Parasites that do noting for the benefit of mankind.

Rant Over.

— I95SPEEDINGTICKETS (View Profile)

Posted on 3/31/2009 7:34:46 PM | reply to this comment | Votes: 3   

Here's an article from Forbes magazine from today.

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Porsche Mired In Debt
Parmy Olson, 03.31.09, 7:15 AM ET

LONDON -

All is not well for Porsche, the German carmaker that appeared Tuesday to have made a killing from hedging shares of Volkswagen. While the company announced an astonishing 6.8 billion euros ($9.0 billion) in net profit booked on cash-settled options of Volkswagen shares, up from 850 million euros ($1.1 billion) last year, it said its net debt stood at a higher than expected 9.0 billion euros ($12.0 billion).

The value of Volkswagen shares, now 23.0% higher than at this time last year, has been driven up by expectations that Porsche would increase its 51.05% stake in the German carmaker to beyond 75.0% so that it can gain majority control under German law. The stock jumped again last week, when Porsche said it had renewed a 10.0 billion euro ($13.3 billion) credit facility that it could expand by another 2.5 billion euros ($3.3 billion). (See "Porsche Gets Credit.")

But the company's mounting debt pile is making a stake-raising maneuver look more unlikely. "People are questioning if Porsche is actually able to go to 75.0% with these [debt] numbers today, and some are coming to the conclusion now that it's not possible," said Tim Schuldt, an analyst at Equinet in Frankfurt.

Shares of Volkswagen slipped by 10.42 euros ($13.85), or 4.4%, to 225.08 euros ($299.17), on Tuesday morning in Frankfurt, while Porsche lost 1.68 euros ($2.23), or 4.5%, to 35.36 euros ($46.99).

One analyst estimates that it will cost 9.0 billion euros ($12.2 billion) for Porsche to increase its stake in VW to 75.0%.

While Porsche might seem wealthy because of the success of its options trades, none of the 6.8 billion euros it booked in the past six months is attributable to cash flow. It is essentially just a number on the company's balance sheet, which grew as VW's share price climbed. That is, until Porsche decides to use it to increase its stake in Volkswagen or alternatively to settle the options and cash in. Schuldt estimates the options to be worth 8.0 billion euros ($10.6 billion) in all.

Unfortunately for Porsche, either move looks unwise at the moment. If it prepares to settle the options, myriad hedge funds and institutional investors that hold Volkwagen shares will immediately short their holdings, or bet that their value will fall, drastically reducing the amount of cash that Porsche can get from its sale.

Increasing its stake in Volkswagen also seems inadvisable since the European Court of Justice has yet to rule on Germany's so-called Volkswagen Law, which allows a stakeholder with as much as 20.0% of a company to block a takeover. "If the Volkswagen Law is abandoned, then you don't need this 75.0% share position, so makes sense to have the option to sit tight," said Schuldt.

The German state of Lower Saxony is Volkswagen's second-largest shareholder, with a 20.3% (blocking) stake, but it is widely expected t

— TurboSpyder (View Profile)

Posted on 3/31/2009 8:25:48 PM | reply to this comment | Votes: 2