• Mar 16, 2011
A group of New York hedge funds have filed suit against Porsche for cornering the market on Volkswagen stock, according to Reuters. The lawsuit claims that the German automaker caused $1 billion in losses by discreetly buying up every freely traded share of Volkswagen stock in an attempt to take over the company in 2008. When Porsche revealed what it had done, Volkswagen stock prices leapt. The hedge funds, meanwhile, had bet big that Volkswagen shares would actually see a dip, and the reversal caused major losses.
The plaintiffs include Greenlight Capital LP, Tiger Global LP, Glenhill Capital LP and Glenview Capital Partners LP among others.

Porsche has rejected the allegations as inadmissible and unsubstantiated. Some of the hedge funds included in this lawsuit were part of a similar filing that failed against the automaker last year. That lawsuit caused some concern about whether or not Porsche's merger with Volkswagen would sail on smooth seas, but thus far, at least, investors seem less concerned about the latest legal woes.

[Source: Reuters]


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    • 1 Second Ago
  • 12 Comments
      • 3 Years Ago
      What hedge funds can WE sue over the gas prices?
      • 3 Years Ago
      Let's give these hedge fund executives the same consideration they give their investors when recommended investments tank = too bad, lick your wounds, and eat your losses.
      • 3 Years Ago
      NO sympathy for the vampire squid hedge funds!

      short selling is a fixed game where the players move the market based on nothing but tag team gang ups on a stock. Once the word is in who is getting shorted, that company is screwed based on nothing but the pile on of short sellers influencing market sentiment.

      These hedge funds specialized in shorting (as so many of them have become) add NOTHING to the productivity of our society, and are just gaming the system because they have ALL the power to influence the rules, and basically suck wealth out of the rest of society. They are a cancer, and unfortunately we're not able to administer the chemo.

      I wish Porsche had succeeded, if only for the token small win this would have meant (in the big picture of losses to the vampire squid). Unfortunately most of those parasites are now driving around in them, despite the losses on this particular stock...

      • 3 Years Ago
      and anybody who minuses my comment (i care not by the way) you're obviously hedge fund vampire squids... pox on your short positions!
      • 3 Years Ago
      Was Porsche publicly traded on an American stock exchange at the time? If not, I don't think this lawsuit has any merit. It sounds to me like the short sellers got squeezed and in order to save face they are suing the people they feel are responsible. I could see how someone in the American finance industry might feel entitled to unlimited gains after the last round of bailouts but this is just insulting.
      • 3 Years Ago
      No sympathy for the hedge funds. They know the risks in their business and they take their chances. This time they lost. Good.
      • 3 Years Ago
      They tried to play the market, and they got schooled..
        • 3 Years Ago
        Thats why I personally find this suit meritless. They placed a bet (what hedge funds are from what I'm told) and lost. I'm pretty sure those who had hedge funds who placed bets for VW are very happy the way things turned out.
      • 3 Years Ago
      So, according to them it's Porsche's fault that these hedge funds betted that VW shares would fall? Idiots.
      • 3 Years Ago
      So, the guys managing these hedge funds made a gamble, and when the gamble didn't pay off, they sue? Talk about sore losers.
        • 3 Years Ago
        Well it's either sue or look for a government bailout, and the US is all out of cash...