Back in 2008, Porsche got the bright idea that it could take over Volkswagen in the midst of the worst economic slump since the Great Depression. Ignoring that this was a catastrophic move for the Stuttgart sports car manufacturer that resulted in it nearly going bankrupt and eventually being taken over by the same company it sought to control, the aftermath has left Porsche Chairman Wolfgang Porsche and board member Ferdinand Piëch in the crosshairs of seven hedge funds that lost out during the takeover and are now seeking €1.8 billion – $2.43 billion US – in damages from the two execs, according to the BBC.

See, investors bet on Volkswagen's share price going down, partially because Porsche said it wasn't going to attempt a takeover. But Porsche was attempting to take over VW, having bought up nearly 75-percent of VW's publicly traded shares. When word broke that Porsche owned nearly three-quarters of VW (which indicated an imminent takeover attempt), rather than go down like the hedge funds bet it would, VW's share price skyrocketed to over 1,000 euros per share, according to Reuters.

Naturally, when you bet that a company's share price is going to drop and it in turn (temporarily) becomes the world's most valuable company, you lose a lot of money, unless you're able to buy up shares before prices jump too much. This led to a squeeze on the stock, which the hedge funds accuse Porsche and Piëch (who are both members of the Porsche family and supervisory board) of organizing.

"Porsche SE and its supervisory board members will defend themselves with all available legal means," a Porsche statement said. This is the second suit against the company, following a case that's pending in Hannover. A similar case was filed in New York, but was later dismissed.

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    • 1 Second Ago
      • 1 Year Ago
      Technically they bought options to purchase shares of VW. They had not yet exercised those options though.
      • 1 Year Ago
      Oh for the poor hedge funds who feed and profit from the financial reverses of others. Apparently the hedge funds believe they have a God-given right to profits even when their business plans result in losses of titanic proportions. Oh for the poor hedge funds, nothing but sore losers one and all. Tough luck guys, time to grow a set.
        • 1 Year Ago
        @Vwfanatic So then it's safe to assume you didn't bother to read the article.
      • 1 Year Ago
      So a US court has determined there was no case and both the US and Germany have not filed any charges? Sounds like the hedge funds are doing what lawyer refer to as "forum shopping." Considering that before the takeover, 20.3% of VW was owned (and may still be owned even though the "Volkswagen law" has been declared illegal by the EU) by the government of the Lander/State of Niedersschsen (Lower Saxony) where Wolfsburg is located, I wouldn't get my hopes up if I were these hedge funds.
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