291 million shares out @ high of day of 1000 EUR, market cap = a mere 291 billion euros, or about 363 billion USD http://markets.ft.com/tearsheets/pe...e=FTCOM&searchtype=equity&searchOption=equity
Deutsche Börse is a joke, they should have stopped VW trading days ago. No ETF / Index tracker can follow Dax index now any more, impossible.
Read the Porsche statement : Porsche has decided to make this announcement after it became clear that there are by far more short positions in the market than expected. The disclosure should give so called short sellers â meaning financial institutions which have betted or are still betting on a falling share price in Volkswagen â the opportunity to settle their relevant positions without rush and without facing major risks. Ha, ha, ha ! Great Stuff !
Efficient market hypothesis anyone? Volkswagen Overtakes Exxon as World's Most Valuable Company http://www.bloomberg.com/apps/news?pid=20601087&sid=aA7K2PJ47n5M&refer=home Volkswagen has risen more than sixfold this year, valuing it at 294 billion euros ($367 billion), more than Exxon Mobil Corp.'s $343 billion market value at yesterday's close, according to data compiled by Bloomberg.
http://www.ft.com/cms/s/0/2ce144b0-a456-11dd-8104-000077b07658.html free float is 5.8% of 291 million or about 16.87 million shares. As of last Thursday, 12.9% loaned, or about 37.53 million shares. ****************** But the sudden disclosure meant there was a free float of only 5.8 per cent â the state of Lower Saxony owns 20.1 per cent â sparking panic among hedge funds. Many had bet on VWâs share price falling and the rise on Monday led to estimated losses among them of â¬10bn-â¬15bn ($12.5bn-$18.8bn). As of last Thursday, according to consultancy Data Explorers, 12.9 per cent of VWâs shares were on loan for investors to go short and bet on them falling â the highest percentage of any German company. Shares in VW closed up â¬309.15 at â¬520, giving it a market capitalisation of â¬153bn, more than all the other US and European carmakers put together. http://www.ft.com/cms/s/0/03012d40-a45b-11dd-8104-000077b07658,s01=1.html VW is a very tightly held stock because, alongside Porsche, the German state of Lower Saxony owns 20.1 per cent, leaving a very small free float of less than 6 per cent. Yet, as of October 23, about 12.9 per cent of VWâs ordinary shares were on loan for short sales â representing the highest proportion for any company on Germanyâs 30-member benchmark Dax index. Worse, index-tracking funds also hold stakes in VW and must retain their holdings so long as VW is a member of the Dax index. With the short interest now almost twice the free float, it leaves hardly any shares for the hedge funds to buy back and close their positions.
Makloda and anyone else I am short VOW right now. Average price is somewhere about 880 euros. Aiming to cover at about 500 euros or so at this stage. Given this great 'efficient' market now, is it a good hedge to go long Porsche, just in case this squeeze continues? Related question: Why isn't Porsche up more? Looks like a free arb for anyone who can get a locate for VOW
Alternative trade idea: Instead of long Porsche and short VW (which is not working) a trader can short DAX and then long another European stock index. This is not an arb but rather a speculative trade based on the idea that if/when VW falls, it will drag the DAX down by a fair bit.
VW: 291 million shares @ 900 euros = 261.9 billion euros. Porsche: 87 million shares @ 45 euros = 3.9 billion euros So VW is "worth" about 60 times more, yet Porsche controls 74% of VW. The 74% Porsche stake is "worth" about 195.75 billion euros, or 190 billion euros more than the entire value of Porsche. http://markets.ft.com/tearsheets/performance.asp?s=PORX,:GER http://www.bloomberg.com/apps/quote?ticker=PAH3:GY http://markets.ft.com/tearsheets/performance.asp?s=de:VOW http://www.bloomberg.com/apps/quote?ticker=VOW:GY