Strange things sometimes happen on the stock market.

In 2000, for example, a small rights holder called EM.TV (Muppet Show, Sesame Street) was suddenly worth more than the giant steel company Thyssen-Krupp.

Even later, one could be surprised when Tesla enjoyed more trust on the stock exchanges than Toyota or BMW even before the first profit was made.

Daniel Mohr

Editor in Business.

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EM.TV soon disappeared again, Thyssen stayed, but had to be relegated to the M-Dax badly plucked.

Tesla still enjoys the confidence of investors, but has fallen by 20 percent in the past few weeks.

760 billion euros market value are still clearly enough for the automotive number one on the stock exchange.

In Europe there is now a wax change.

It is now becoming apparent what really counts for investors on the stock exchange: luxury.

A week after its IPO, Porsche has now overtaken its parent company VW in market value.

On Thursday, the Porsche share price temporarily rose by more than 6 percent to 93.50 euros.

This gives Porsche a market value of a good 85 billion euros.

That is very little compared to Tesla, but significantly more than all other European car manufacturers bring to the stock market scales.

Core VW shrunk to 14 billion

VW itself has a market value of 27 billion euros in the preferred shares listed on the Dax and a good 51 billion euros in the common shares, so a total of “only” 78 billion euros.

This includes the subsidiary Porsche with a share of 75 percent of its market value, i.e. 64 billion euros.

This leaves the rest of VW, i.e. in particular VW itself, Audi, Seat and Skoda, with a market value of just 14 billion euros.

Is that justified?

Good question.

Porsche delivered a good 300,000 vehicles last year, generating sales of 33 billion euros (around 110,000 euros per car) and 4 billion euros in profit (a good 13,000 euros per car).

The entire VW group sold 30 times as many cars as Porsche (nearly 9 million), achieved almost eight times the turnover (250 billion euros) and made almost four times the profit (15 billion euros).

The turnover per car in the group is only a good 27,000 euros, the profit per car is 1700 euros.

So Porsche can work with much more reasonable margins.

This was advertised at the time of the IPO and it also caught on with investors, especially in view of the high inflation.

While Skoda, Seat or Golf customers may now have to turn over every euro twice, Porsche customers can usually access large reserves.

The super rich are getting bigger

The core message of the IPO, which CFO Lutz Meschke also emphasized in his speech on the trading floor last week: According to estimates, the number of wealthy private customers with at least one million dollars in liquid assets (i.e. a core clientele of Porsche) is increasing from 43.1 million people in 2016 to 106.3 million people by 2026.

The number is growing particularly quickly in China, one of the reasons why

Porsche

sees a lot of potential there.

The market for two-door sports cars and luxury SUVs is expected to grow between 6 and 7 percent a year until 2026.

Other manufacturers are more dependent on the economy and feel more strongly when people are short of money.

Luxury is generally in demand on the stock exchange, it is not for nothing that the French luxury group LVMH is the most valuable European company on the stock exchange with 323 billion euros.

It was only with this strong brand position that Porsche was able to go public on the day of the Dax annual low and flush VW 9.4 billion euros into the coffers.

On Tuesday, the purchase of shares by the VW owner company Porsche SE followed, which now also has a direct stake in Porsche AG with 7 billion euros.

A clear commitment by the Porsche and Piech families, who own Porsche SE, to their company.

In the first few days, the accompanying banks had to support the Porsche share price so that it did not fall significantly below the issue price of 82.50 euros.

A good 300 million euros were needed for this, as the Bank of America has now reported.

In the past few days, however, the price has risen sharply without any help, while VW shares are still well below the prices on the day Porsche went public.

Fund managers and analysts report reallocations.

Overall, the proportion of car shares in the fund should not increase and then money was shifted from VW and other car shares to Porsche shares.

Luxury is trumps and Porsche is pure luxury.

General Motors has a market value of 52 billion euros, Ford 50, Stellantis (Peugeot, Fiat, Opel, Chrysler) 40, Mercedes 57, BMW 47, Ferrari 35 and Porsche just 85 billion euros.