Porsche the hedge fund.

[KaptKaos]

http://www.dailymail.co.uk/money/article-1166248/Porsche-The-hedge-fund-makes-cars.html

PORSCHE: THE HEDGE FUND THAT MAKES CARS
(From DAILY MAIL (London), provided by LexisNexis) | April 1, 2009 Wednesday

IT'S known for its racy sports cars, but Porsche is fast building a reputation for its even racier punts on the shares of Volkswagen.

The German producer of the 911 and Boxster cars yesterday revealed it made an astonishing £6.33bn windfall gain from its investment in VW stock in the first half.

Porsche has been building up a stake in VW since 2005, and now owns 50.8pc of Europe's biggest auto group.

The sports car producer has made more than £12bn from betting on a rise in VW's shares this year and last, as it edges closer to seizing full control.

Porsche was also let off the hook by German regulator Bafin, which yesterday ruled the car group's share dealings in VW broke no market rules.

The carmaker said half-year pre-tax profits rose to £6.75bn, up from £1.54bn. The earnings figure was more than twice its revenue from selling cars, down 13pc at £2.8bn.

The gains made during the first half beat the £6.31bn Porsche made from betting on VW shares over the whole of last year.

But it warned profits could be hit extremely hard if the VW share price falls.

Porsche said it intended to increase its stake in VW, adding: 'The company is therefore keeping all its options open. However, a precondition for any investment activity is that the economic conditions support it.'

UniCredit analyst Georg Stuerzer said Porsche's results remained 'in need of explanation'.

But he estimates that Porsche bought its last 20pc of shares at an average price of e103. The shares are now worth more than

e230 apiece. The results have cemented Porsche's reputation as a 'hedge fund with a captive auto business', as one analyst described the business.

The carmaker has upset traditional hedge funds, which bet that a company's shares will fall.

Last October, news that Porsche had secured access to about 74pc of VW shares led to VW's shares quintupling within 48 hours, briefly making the group the world's most valuable company.

This forced short- sellers to scramble around to buy stock to cover their failed bets.

Porsche then sold a small package of VW options to relieve the buying pressure, which sparked an outcry from shareholders such as Deutsche Bank's investment arm DWS that it had manipulated the market.

But Bafin has cleared the group of any wrongdoing over the matter.

[pwd72s]

No longer the small family firm making sports cars containing a spark of genius...

My memories of the good times remain...