As the automotive industry continues to evolve, many automakers compete to produce the electric (EVs) and autonomous vehicles that represent the future of the industry thanks to trailblazers like Tesla Inc. (NASDAQ: TSLA). This trend within the auto industry requires that automakers adapt to new technology to meet growing consumer, commercial and regulatory demand for low-emissions vehicles.
The pervasive industrial shift incentivized Volkswagen to spin off its Porsche luxury sports car division in 2022. Investors looking to buy Porsche shares are in luck. This guide will cover how to accumulate shares in a renowned auto company.
When Did Porsche IPO Go Public?
After years of planning and rumors, Porsche finally went public on Sept. 29, 2022. Porsche came ion the public market with a share price of 82.50 euros. The IPO raised $9.2 billion for the company. Porsche has been a volatile stock since becoming public and is down from its IPO price.
Porsche Financial History
The Porsche holding company was originally known as Porsche AG. The company was renamed Porsche Automobil Holding SE or Porsche SE in 2007.
Volkswagen owns 12 major automotive brands from 7 European countries, as well as some additional investments. After Porsche had racked up over 10 billion euros in debt by 2009, Volkswagen AG and Porsche SE agreed to merge the two companies' car manufacturing operations into one company by 2011 to form an integrated automotive group.
The integrated group had agreed on 50.7% of Volkswagen falling under the control of Porsche SE in exchange for Volkswagen assuming management positions in Porsche SE to remain in control. Volkswagen also acquired an ownership position in Porsche SE. Volkswagen later paid 4.46 billion euros in 2012 for the remaining 50.1% of Porsche's automotive businesses.
Porsche SE remains the single largest shareholder of Volkswagen and the holding company for the Porsche family's 50.1% stake in Porsche Zwischenholding GmbH, which holds 100% of the original Porsche stock.
Porsche SE holdings and investments structure. Source: Porsche SE
Porsche Spinoff Potential
The Volkswagen Group is the second-largest automobile company in the world and the largest carmaker in Europe. It operates 119 production plants and employs approximately 676,000 people in 19 European countries and 10 countries in the Americas, Asia and Africa. The Group sells its products in 153 countries worldwide. A Porsche spinoff could benefit Volkswagen's share price.
Fiat Chrysler spun off its 90% stake in its Ferrari (NYSE: RACE) sports car division in 2015. The move was immediately beneficial to Fiat Chrysler's stock price and that stock tripled in value over the next year. Although Ferrari's share price initially fell from its $52 per share IPO price, it has since recovered very well to currently trade at close to $300 per share.
Investors who accumulate Porsche shares could potentially do well if the luxury car company performs like Ferrari. Ferrari also had post-IPO hiccups but has proven to be a viable long-term investment.
How to Buy Porsche Stock
It's easier than ever to participate in an initial public offering. Many stock brokers buy pre-IPO shares and offer shares to their users. However, you can buy Porsche shares right away since the company has already gone public. Here's what you need to know if you want to buy Porsche stock.
Pick a Brokerage
Investors should review brokers based on their fees, features and other perks. These details impact how much money it costs to trade stocks and your ability to access valuable information. Investors can start with these best brokers and expand their search if necessary.
Decide How Many Shares You Want
After creating a brokerage account, you can decide how many shares you want to buy. Investors should assess a company's financials to determine the fair value and invest accordingly. You shouldn't put all of your eggs in one basket, and you can buy fractional shares if you need a more affordable way to get started.
Choose Your Order Types
Investors can choose from several order types, but most market participants either initiate market orders or limit orders.
Market orders allow you to buy shares at the current stock price. Your broker can execute these trades within seconds. Limit orders give you more flexibility and can help you save money. For these orders, the investor designates a price for the order to go through. If a stock trades at $20 per share, but you believe it is only worth $19 per share, you can set a limit order for $19 per share. Under this arrangement, your order will only go through if the stock's price falls to your price. However, your order will not go through if the stock stays above $19 per share.
Execute Your Trade
If your broker informs you that your order has been successfully filled, then the shares will show up in your account. You can decide if you want to buy more shares, sell some of your position or hold onto your current shares.
Best Online Brokers
Below is a list of the best brokers for your consideration.
Is Porsche Stock for You?
Porsche stock could be promising for sports car investors. You can get started with any amount of capital. Investors can also accumulate funds that hold onto sports car stocks like Porsche.
While you can't get into Porsche as a privately held company anymore, you could still buy shares on the open market.
If you're serious about investing in Porsche stock, you may want to consider accumulating shares now. Investors should assess their portfolio diversification, risk tolerance and financial goals before buying Porsche stock.
Frequently Asked Questions
Is Porsche owned by Volkswagen?
Yes, Porsche is technically owned by Volkswagen. The two companies merged in 2011. Porsche was designated as one of Volkswagen’s subsidiaries.
Is Porsche a publicly traded company?
Yes. Porsche stock has been in the open market since Sept. 29, 2022.
Is Porsche stock a buy or sell?
Porsche is a promising luxury car company that can make sense for investors’ portfolios. It is important to assess your risk tolerance before committing to a stock.
Related content: How to Buy Volkswagen (VWAGY) Stock