Porsche suffers $6.6B loss thanks to VW share writedowns
Here we are in 2009 and Porsche's fortunes couldn't have shifted more. The freezing of the credit markets plus Porsche's enormous 10 billion euro debt-load led to VW performing a reverse takeover of its fellow German automaker. All those VW shares and stock options? VW shares are at its lowest price in over two years, leading to a year-end write down loss for Porsche of 4.4 billion euros ($6.6 billion US) for the year. The loss is far greater than Porsche expected earlier in the year, as the German automaker in June estimated its yearly profit of nearly $1 billion.
As part of its huge loss, Porsche drastically cut its dividend to .05 euros per preferred share. The move is considered to be "symbolic", or as we like to call it, "not what shell-shocked investors were hoping for." VW will reportedly purchase 49 percent of Porsche by year-end for 3.9 billion euros ($5.8 billion US), with hopes of obtaining the outstanding Porsche shares by 2011.
[Source: Automotive News - Sub. Req. | Image Source: Nigel Treblin/Getty]
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