The Volkswagen squeeze

The revelation in October that German car manufacturer Porsche owned more of Volkswagen (VW) than had been thought sent the stock price of VW yo-yoing. The volatility caused huge losses on relative value trades put on by hedge funds. Ryan Davidson reports

risk-081201-19-gif

Porsche was once described as a "hedge fund with a car showroom" by Max Warburton, an analyst at New York-based investment management firm Alliance Bernstein. Many market participants felt there was good reason. The Stuttgart-based car manufacturer has consistently made huge sums of money through its equity options portfolio - in some years, more than it generated by making cars.

In its most recent earnings release, on November 7, the company revealed it had made a EUR6.83 billion gain on cash

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

What gold's rise means for rates, equities

It has been several years since we have seen volatility in gold. An increase in gold volatility can typically be associated with a change in sentiment and investor behavior. The precious metal has surged this year on increased demand for safe haven…

Most read articles loading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here