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Porsche IPO with 72 Billion Valuation

Porsche has made its public debut in one of Europe's largest IPOs to date, defying one of the weakest listing markets in years.

Porsche AG shares had a see-saw start on Thursday, after Volkswagen (VOWG_p.DE) defied volatile markets to list the sports car brand at a valuation of 75 billion euros ($72 billion) in Germany's second-biggest market debut.

The shares closed at 82.50 euros ($80.74), returning to their issue price from the session high of 86.76 euros.

Volkswagen priced Porsche AG shares the top end of the indicated range, and raised 19.5 billion euros via the listing to fund the group's electrification drive.

The luxury carmaker, which is majority owned by Volkswagen, listed in Frankfurt at the top of its range. The share price of €82.50 gave the company a reported market cap of around €78 billion (about $76 billion).

Porsche's listing is a bright spot for European IPOs, which have plummeted this year after a frenzied 2021. Only 231 companies have listed in 2022, according to PitchBook data, compared to 873 during last year's surge; both IPO count and aggregate value are on pace for potential decade lows.

Market volatility due to factors including surging inflation and the war in Ukraine has caused many public market hopefuls to press pause on their ambitions. EQT-backed skincare firm Galderma and VC-backed WeTransfer are among several companies who have postponed or canceled their IPOs this year.

While companies seeking to go public in Europe might hope Porsche's listing is a sign that the IPO window is reopening, the massive debut is far more likely to be a one-off.

Being one of the world's most well-known brands has insulated Porsche from the negative market conditions, and it also benefits from the fact that the Porsche-Piëch family is taking a large stake in the IPO.

Executives at Volkswagen and their bankers have insisted that Porsche could buck the dismal trend for I.P.O.s. In recent weeks, they have tried to convince prospective investors that the sports car maker had healthy business prospects, with an operating margin of nearly 20 percent; a recognizable brand; well-heeled customers willing to spend on expensive cars regardless of economic conditions; and a strategy for moving into battery-powered vehicles, spearheaded by the Taycan sedan.


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