What a great time to announce a European IPO.
Well, our friends at VW were really forced into telling everyone that they were planning to list 25 per cent of the Porker company because everyone knew anyway. Investor relations is not one of VW or the Porsche family’s key skills.
But you can see the problem of trying to keep things shtum when the Porsche-Piech family own 53 per cent, the state of Lower Saxony (helmed by Ministerpräsident Steve Weil) owns 20 per cent and the nation of Qatar (with His Excellency sheik Mohammed Bin Abdulrahman Al-Thani in charge) hold 10 per cent. And despite Herbie Diess, the boss of VW, saying that an IPO of Porsche “would give us additional flexibility to further accelerate the transformation (to electric self-drive)”, the explanation is really much simpler.
VW has a market cap of $136bn. If Porsche was a standalone listed company it would have a market cap of $140bn. In other words, one of the world’s smallest carmakers is worth more than one of the world’s biggest (which owns it). Let’s put it another way. VW turn out nine million cars a year. Porsche only makes 300,000 but that 3 per cent of cars generates 35 per cent of VW’s pre-tax profit for the whole group. That’s why VW shares are selling at a discount. Specialists outperform generalists over time.
So when what is now Stellantis, the multi-car conglomerate, listed its 10 per cent of Ferrari for $76 a share in 2015 the market laughed. Recently the stock touched $370. Feezer is more valuable than most of the luxury purse, sparkling French and perfume brands and sells at 39 times earnings versus Merc at seven times. (Twenty readers, one friend and one son remember the people at the Mercster company are much nicer than those at other lesser car companies who suck up to you once and then you never hear from them again. Men are so fickle aren’t they?)
Anyway, the Porker float will be up against the McLaren and Lotus IPOs, which will probably be as successful as the Aston Martin float.
In October 2018 when the James Bond carmaker was listing in London, then Aston Martin chief executive Andy Palmer told the media: “We don’t make cars, we make dreams.” Those dreams included electric flying cars, Aston Martin-branded houses, a submarine and making money.
The float valued the company at $9bn which was a nice little earner for the owners who had paid $1bn for it a few years earlier. But as you know, in business history doesn’t count and dreamy punters paid $33 a share that then wallowed around $2, going as low as 40c before closing yesterday at $11. Anyway, what’s a loss of $8bn between petrol heads for a company that’s gone belly up seven times in 106 years.
But, if you really want to cry, think about what is now the world’s most valuable company. Get ready to vomit. It makes electric cars (and rockets). It listed in June 2010 offering shares at $20. For three years you could buy as many as you wanted for between $3 and $10. Recently they hit $1500 making Telsa, the silent car and noisy rocket company, worth over $1 trillion. Toyota and VW are the second and third most valuable carmakers.
Still, if you buy one – or any iPad-holder on wheels – get ready for trouble. Our favourite consumer organisation, Which? in the UK, reports that electric cars are more likely to develop a fault than petrol or diesel models. More than 30 per cent of electric car owners reported a problem with their vehicle in its first four years compared with 19 per cent of petrol car owners and 29 per cent of diesel drivers. Faulty electric vehicles spent an average of five days off the road compared with three and four days for petrol and diesel cars in their first four years.
Now, while Hamo, Mad Max and all your other favourites from the F1 reality TV series are testing their new non-electric vehicles in the desert of Bahrain today, the real star of world motorsport, Shane van Gisbergen, has been testing rally cars in Canberra (the Bahrain of Australia). Like many other famous Australians (Russell Crowe, Sam Neill, Keith Urban, Greg Murphy, Jim Richards and Ned Kelly) Shane is actually a Kiwi.
Given he won the first Supercar race of the year at Eastern Creek Par La Tip last Saturday by about three years and came sixth in he second race after giving the other drivers a 30 minute start, competitors in the Australian Rally Championships (of course the first race is in Canberra on April 1 – a double win there) should be trembling in their Sparcos.
Winner of the second race was Chaz Mostert from Melbourne, the Huntley of Australia. As the NZ Herald tells us, Huntley received 150,00 votes on the Facebook Page Shit Towns of New Zealand to claim the country’s least-sought-after accolade: “Shit Town of the Year”.
‘‘Huntly is famous for towering smoke stacks, its fading Topp Twins mural and being the place where both the S1 and the Waikato river apparently flow through without thinking to stop.’’
Now of course Shane is not limiting himself to being the Australian Supercars and Australian Rally Champion. Aucun siree Bob! He’s heading to Le Mans in June to wheel the Riley Motorsports LMGTE Pro Ferrari 488 GTE Evo around the piste de course. Naturally all this and the Curling World Titles will be on Kayo.
Now I have to mention that Pirelli, the tyre company better known for their calendars of non-men or others with only tyre marks covering their bodies, have launched Powergy, a new range of summer tyres for CUV, SUV and medium-large sedans. Pirelli are now this column’s favourite company that speaks to us (we never heard from MG again) after inviting me to a free lunch (which I couldn’t attend due to no previous commitments) and Mercedes never inviting me to anything.
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