GERMANY/FILE: VW shares halve as Porsche eases short squeeze

Record ID: 258740

  • Title: GERMANY/FILE: VW shares halve as Porsche eases short squeeze
  • Date: 30th October 2008
  • Summary: EU) WOLFSBURG, GERMANY (OCTOBER 29, 2008) (REUTERS) EXTERIORS OF CAR PARTS SUPPLIER FAIR "IZB" IN WOLFSBURG WHERE VOLKSWAGEN HAS ITS HEADQUARTERS VOLKSWAGEN (VW) CHIEF EXECUTIVE MARTIN WINTERKORN WALKING PAST, TOURING FAIR PAN DOWN VW STAND WINTERKORN TELLING REPORTERS HE IS HERE TODAY FOR A TECHNOLOGY SHOW AND NOT A SHARE INDEX SHOW AND RESPONDING TO REPORTER'S QUESTION "IN THAT RESPECT, I'M NOT SURPRISED ABOUT ANYTHING ANYMORE" (SOUNDBITE) (German) MARTIN WINTERKORN, VOLKSWAGEN (VW) CHIEF EXECUTIVE SAYING: "We demand from political leaders that they become aware what is currently happening in the car industry sector and that they deal very carefully with the requirements which put additional pressure on us." WINTERKORN GETTING INTO CAR
  • Embargoed: 14th November 2008 12:00
  • Keywords:
  • Topics: Industry
  • Reuters ID: LVAEES1TGZO7IF8FRYFKNWF50GYP
  • Story Text: Volkswagen demands sympathy from political leaders as German car giant's shares halve after Porsche eases short squeeze.
    Shares in carmaker Volkswagen nearly halved on Wednesday (October 29) after controlling shareholder Porsche SE took steps to ease a squeeze on shortsellers that more than quadrupled the stock in days.

    "In order to avoid further market distortions and the resulting consequences for those involved, Porsche SE intends -- depending on the state of the market -- to settle hedging transactions in the amount of up to 5 percent of the Volkswagen ordinary shares," Porsche said in a statement.
    Volkswagen chief executive Martin Winterkorn, during a tour of a car parts supplier fair in Wolfsburg, called on political leaders to be attentive to developments in the car industry.

    "We demand from political leaders that they become aware what is currently happening in the car industry sector and that they deal very carefully with the requirements which put additional pressure on us,"
    Winterkorn said.
    Winterkorn refused to comment on the price of VW shares, telling reporters he was there for a technology show and "not a share index show".
    Porsche itself had prompted the meteoric rise in VW stock with its announcement on Sunday (October 26) that it had effective control of 74.1 percent of VW, leaving less than 6 percent in the market.
    A resulting stampede to cover open short positions vaulted VW's market value to 278 billion euros (348 billion US dollars) and its shares to finish at a record 945 euros on Tuesday (October 28).
    Investors cried foul and German securities watchdog BaFin said it would take a closer look at Porsche's dealings for signs of insider trading and market manipulation, but the company once again rebuffed any guilt in the matter on Wednesday.

    "Everything still depends on VW shares: they decide about everything what is currently happening here," Frankfurt trader Dirk Mueller of MWB Fairtrade told Reuters Television.

    "A few hundred points up or down in VW shares immediately mean several hundred points for the DAX. This will only change once we the company's weighting in the DAX index (to 10 percent) next Monday,"
    Mueller said, adding "for now, you can't take the DAX too seriously."
    In Brussels earlier, the European Commission said it was ready to support the car industry and help it achieve EU targets to curb CO2 emissions despite the economic crisis, according to EU Commission President Jose Manuel Barroso.
    ENDS.
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