Shares of VW shot up in trading on the Frankfurt market today, as investors rallied to the stock spurred by the possibility of a take-over of VW by Porsche. The stock reached a high of €1,005.01 euros at one point, making Volkswagen the largest company in the world by stock valuation. With the stock at that price, the company was worth about €296 billion euros, larger than Exxon-Mobil, the world's number one company by value as of the close of the trading day on Monday.
One trader quoted in the Reuters story said: “We were joking before about the share price hitting €1,000, and all of a sudden, it was there. This is perverse.”
VW stock, then fell back to around the €650 euro mark, still up over 25% for the day.
The company's stock has been buoyed by speculation that Porsche will succeed in its hostile takeover of VW. Both the government of the state of Lower-Saxony in Germany, which owns a minority equity stake in VW, and the worker's council which represent VW's organised labor both oppose Porsche obtaining a controlling stake in the company.
VW is unique among auto stocks, having risen in value by over 77% in the past year, while most other automotive stocks have been plummeting during the recent financial crisis. PSA/Peugeot-Citroen is down by almost a quarter of its value this year, and GM's stock fell last month to single digits, trading at prices it had not seen since the 1950s.
joelynn
October 28, 2008 5:20 PM
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