Porsche SE, maker of the 911 sports car, was sued by short sellers in Volkswagen AG stock who claimed Porsche secretly cornered the market in Volkswagen shares and later caused them more than $1 billion in losses.
The suit was filed yesterday in Manhattan federal court by Elliott Associates LP, Glenhill Capital LP, Glenview Capital Partners LP and other short sellers. It follows the failed effort by former Porsche Chief Executive Officer Wendelin Wiedeking to take over Volkswagen, which makes more cars in a week than Porsche does in a year. Volkswagen, Europe’s largest carmaker, is now acquiring Porsche’s sports-car business.
The short sellers claim that Porsche misled investors by denying through much of 2008 that it intended to acquire Volkswagen and by using manipulative trades to hide its stock positions. Stuttgart, Germany-based Porsche said in October 2008 that it controlled most of Volkswagen’s common stock, causing the shares to surge as short sellers raced to buy shares borrowed in a bet that the Volkswagen stock would fall.
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