Volkswagen’s share price rose 27% on Thurday – the highest share price rise the DAX has ever seen in such a short period of time.
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According to Automobilwoche, at the end of the day on Thursday, shares were valued at 304 euros, up 42% since the beginning of the work. This valued Volkswagen at 90bn euros, more than it has ever been worth before.
According to stock exchange experts consulted by Automobilwoche, the price rise was not caused by one of the major shareholders buying up shares. Porsche is planning to increase its stake from just over 35% to over 50%, but Porsche was not buying up shares yesterday. Neither was the State of Lower Saxony, which is also mooted to be considering raising its stake in the company.
Christian Wulff, president of the State of Lower Saxony confirmed today that it had not bought shares.
Speculation ahead of major share purchases by Porsche and Lower Saxony would push the share price up, but not by this much.
The Wall street Journal’s Deal Journal said that some traders blame the fall of Lehman Brothers. They say that Lehman was a big lender of VW stock to hedge funds, which then place bets that the shares would fall (so-called short-selling strategy). The hedge funds would effectively sell the stock and buy it back at a lower price. However, when Lehman filed for bankruptcy many hedge funds were forced to buy back shares.
The Deal Journal also noted that VW’s stock is volatile because so few shares are traded on the market. Porsche and Lower Saxony own 55% of shares between them.
