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Porsche stock falls after Frankfurt IPO

Yahoo Finance Live anchors discuss stock performance for Porsche.

Video Transcript

[AUDIO LOGO]

BRIAN SOZZI: All right, shares of Porsche in focus after the company priced the top-end of their range, valuing the automaker at roughly 75 billion euros, making this one of the biggest public offerings in Europe history. And this one had all the writing on the wall of being well-received by the market, despite this ongoing pressure in broader markets.

A couple of bullet points it checks off first. You have Porsche making a strong push into electric vehicles. They own a 10 per state-- 10% stake in a super car electric-maker Rimac. So market likes seeing that as well. And also sales through the first half of this year up 8 and 1/2%. Operating profits up close to 25%. So a lot of things to like, outside of the fact, this is Porsche.

BRAD SMITH: Yeah, well, we were talking about Lucid just the other day. And how similar to retail or at least analogus with it-- analogous, excuse me, with it, where you have some of the higher ends of certain markets, especially as it relates to the higher-end consumer that are still performing well or at least holding up better than middle tier or even kind of low-income portions of the market, where you would see some of those dollars being put to work on consumer discretionary fashion.

Porsche, of course, at the high end of the market. It's gonna be interesting to see how they hold up, in terms of some of their car sales, going forward from here. Because yeah, as much as it is something to be able to get around in a luxury fashion, it's still also something that is going to perceivable carry more value over time than if I were to get into, I don't know, a Subawu at this point.

BRIAN SOZZI: Subawu. [LAUGHS]

JULIE HYMAN: Subawu?

[LAUGHTER]

Sorry, inside joke, ladies and germs. It's interesting that Porsche is now down so much on the day. It did open higher and there seemed to be some early enthusiasm for this. And now, we are seeing that tumble. Not sure what the catalysts would that-- for that would be. But you know, there was some--

BRIAN SOZZI: That's quite the reversal.

JULIE HYMAN: --early optimism in there. Yeah, it is quite the reverse-- reversal. Was up something like 2% earlier in the session. So not sure exactly what's going on here.

BRIAN SOZZI: Yeah, it was interesting, too-- I'll just quickly mention here, you had a good note out of, I believe, it was Morgan Stanley yesterday on Ferrari. Calling that name recession-proof. Now, if Ferrari's recession-proof, I mean, Porsche has to be right there, Brad, almost.

BRAD SMITH: Yeah, well, I mean, if we're looking at this day one action, too-- and one of the critical things that this also kind of points back to is what we were talking about earlier this week with some of the shifts in the IPO market. And the data that even Goldman Sachs and their research had put out, really pointing out that the IPO market has dried up.

Companies are looking for any opportunity, if they need to get out the door, to not just woo the investors on day one, but to also make sure that they can shore up capital, regardless of the day one reaction that is going to allow them to weather this near-term economic downturn as well. And so for Porsche it just spells out that, yes, the capital was needed, regardless of what the market or what the valuation is looking like even after this IPO has made it out the door.

It's a larger question of, how they're going to use this cash, put it to work, and be able to then navigate what the rest of the companies in the automotive landscape are navigating as well. Everything from employment, and all the way to getting the necessary chips, and on Porsche's side, retaining the mind-share of the high-end luxury consumer, too.

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