Autoblog

Porsche again staring down another $1.8B in hedge fund lawsuits

Jonathon Ramsey — Wed, 15 May 2013 11:30:00 EST

Filed under: Europe, Government/Legal, Porsche

The sequence of events from 2007 that began with Porsche's secret attempt to take over Volkswagen, and instead lead to Porsche being taken over by VW, continues to instigate lawsuits against the Stuttgart sports car manufacturer. A group of hedge funds that suffered over $1 billion in losses sued the car company in New York. Porsche had publicly stated it wasn't trying to buy VW, the hedge funds in question were shorting VW stock, and when Porsche's actual intentions were revealed, the stock shot up and the hedge funds took a beating.

The case was thrown out over the issue of jurisdiction, then appealed, only to see another suit filed on top of that. After that, most of the hedge funds withdrew their claims in New York and Porsche offered a 90-day window to refile in Germany where it is already fighting a number of other suits over the same issue. The hedge funds accepted the offer, refiling in Stuttgart for $1.8 billion in damages. According to Bloomberg, Porsche hasn't commented on the refiling, but as the same plaintiffs are involved, it's safe to assume that the carmaker still feels the case is "unsubstantiated and without merit." It has fared alright so far even in German courts, with two lesser cases against it thrown out last year.

Porsche again staring down another $1.8B in hedge fund lawsuits originally appeared on Autoblog on Wed, 15 May 2013 11:30:00 EST. Please see our terms for use of feeds.

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Wall Street loves Tesla's Elon Musk, values the brand higher than Fiat

Jeremy Korzeniewski — Tue, 14 May 2013 10:15:00 EST

Filed under: Earnings/Financials, Tesla

Tesla's value on the stock market far exceeds the number of vehicles it contributes to the automotive market. According to a report from Automotive News, Tesla is currently valued at $8.8 billion. Almost unbelievably, though we've never claimed to have a firm grasp on the inner workings of the stock market, that's a full billion dollars more valuable than Fiat and three times more valuable than PSA Peugeot Citroën, says the report.

How unfathomable is that statistic? Consider the fact that Tesla, a ten-year-old company, just managed to turn its very first profit last quarter and has produced fewer than 10,000 vehicles in its lifetime. How does that compare to an automotive giant like Fiat? Well... it doesn't - The brand sold 44,772 Fiat 500s in the United States alone in 2012, and it owns or controls the Chrysler portfolio of brands along with Ferrari and Maserati... not to mention the hundreds of thousands of cars Fiat Group sells yearly in the rest of the world.

Granted, the number of vehicles sold by a brand is just a small portion of its value, but you may still wonder, Why is such a seemingly small player in the global automotive marketplace such a big deal on Wall Street? According to AN, it has a lot to do with its controversial and headline-grabbing CEO, Elon Musk, and the way he disseminates company information to his investors. How so? We suggest you take a good look at the article here for the whole story.

Wall Street loves Tesla's Elon Musk, values the brand higher than Fiat originally appeared on Autoblog on Tue, 14 May 2013 10:15:00 EST. Please see our terms for use of feeds.

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Why Tesla will need more loans to make it through 2013

Jonathon Ramsey — Fri, 28 Dec 2012 08:44:00 EST

Filed under: Earnings/Financials, Tesla

It's fun to bet against Elon Musk and Tesla - that's the best reason we can find for so many people doing it even though the man, his company and his cars are still here and still very popular. The latest name inscribed in the column labeled "Skeptical of Tesla" is John Shinal at Market Watch who, in year-end commentary on Tesla's financials, says that the "carmaker's financials are reminiscent of a dot-com's." He does not mean that in the good way.

To be fair, Shinal isn't exactly betting against Tesla, he's saying that if you check the bottom lines, the only thing keeping Tesla alive is the hundreds of millions in Federal Department of Energy loans it has received. Based on its filings, he says the company has less than six months of cash on hand, hasn't produced as many cars as it promised and had to lower its revenue forecast for 2012, has had a "year of net losses and negative operating cash flow," and was underwater by at least $37 million at the end of the third quarter.

But Shinal's not done there, summarizing Tesla as an operation with "a poor habit of failing to deliver to customers the cars it has promised them, while simultaneously raising the prices of those yet-undelivered cars," and "a lousy level of customer service." He says there are more damning things to be found in Tesla's SEC registration settlement from September, but we'll have to wait for his next column to find out what those are. The takeaway, in Shinal's opinion, is that even though Tesla will keep getting money from the government, that investors have no business dealing in Tesla stock.

Early in his piece, Shinal says Tesla's financials are worse than those of Zynga and Groupon, two hot dot-coms that have fallen on their faces since their IPOs. Shinal knows far more about finances than we do, but we wonder if it makes the most sense to compare a brand new car company developing brand new technologies - with the colossal amounts of up-front cash each one of those things requires, and a company with Tesla's record so far - to a social media game developer and an online coupon distributor. Head over to Market Watch to read the full piece.

Why Tesla will need more loans to make it through 2013 originally appeared on Autoblog on Fri, 28 Dec 2012 08:44:00 EST. Please see our terms for use of feeds.

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Peugeot's woes worsen, company to be delisted from CAC 40 stock index

Jonathon Ramsey — Tue, 11 Sep 2012 09:31:00 EST

Filed under: Earnings/Financials, Peugeot

After 25 years and having been a member since the CAC 40's inception in 1987, on September 24, French carmaker Peugeot will be officially delisted from France's benchmark stock index. The CAC 40 is a collection of the 40 companies with the "most significant values" among the top 100 firms by market capitalizations listed on Euronext Paris (the French stock market). Peugeot has been struggling, and that's putting it kindly. With a first-half loss this year of €819 million ($1.047B U.S.), its stock is enduring near-26-year lows, having lost more than 60 percent of its value over the past year alone. In fact, its market cap has lost about €400 million ($511M U.S.) in just the three weeks since speculation of its delisting was first reported. The CAC 40, on the other hand, has risen by 11 percent over the past year.

According to Bloomberg, Peugeot has declined to comment on the situation. The assessment of most commentators is that, beyond the blow to prestige and the heightened impression that Peugeot's ship is listing further, this can only make things worse, since it could push Pug stock out of index-tracking and exchange-traded funds. Ominously, the trend is for stocks to underperform the index by roughly 15 percent after being delisted. A potential bright side, according to one analyst, however, is that being out of the spotlight could help relieve Peugeot stock of short-selling pressures.

The carmaker's place will, as expected, be taken by Belgian chemical company Solvay. Peugeot stock will move to a different index, the CAC Next 20, where Solvay is currently listed.

Peugeot's woes worsen, company to be delisted from CAC 40 stock index originally appeared on Autoblog on Tue, 11 Sep 2012 09:31:00 EST. Please see our terms for use of feeds.

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Ailing Peugeot may get boot from French stock exchange's benchmark CAC 40 index

Jonathon Ramsey — Thu, 23 Aug 2012 08:29:00 EST

Filed under: Europe, Earnings/Financials, Peugeot

The clouds that have been darkening the forecast for Peugeot just keep getting darker. The latest storm front involves the risk of being delisted from the CAC 40, the benchmark index composed of the 40 companies with the "most significant values" among the the companies with the top 100 market capitalizations listed on Euronext Paris (the French stock market). The blow wouldn't just hit Peugeot's prestige, but it's stock price, too - and that has already sunk so low in the five months since General Motors bought into Peugeot that GM is looking at taking a €174 million ($215M U.S.) charge.

Peugeot's market-cap of 2.4 billion euros - roughly $3B U.S. - is 77th out of the top 100 companies on Euronext by valuation. That's where the phrase "most significant values" comes in; even though it's already well outside the numeric cutoff, the selection committee for the CAC 40 has discretion and Peugeot is a marquee French company. This is also where politics come in - cutting Peugeot from the top ranks, even if only in name, especially with speculation that the carmaker would be replaced by a Belgian chemical company, would hurt far beyond the company walls.

A meeting of the selecting committee is expected to take place the first week of September, and analysts believe that, short of "an exceptionally 'political decision,'" Peugeot will find itself outside the club. In that case, analysts expect further selling pressure on Peugeot stock to the tune of seven million shares, which would force the its price even lower. The sooner the automaker can get the French government behind its plan to cut its overcapacity in factories and plant personnel, the sooner it can begin to put a stop to the gloom.

Ailing Peugeot may get boot from French stock exchange's benchmark CAC 40 index originally appeared on Autoblog on Thu, 23 Aug 2012 08:29:00 EST. Please see our terms for use of feeds.

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Montezemolo denies Ferrari IPO

Noah Joseph — Fri, 22 Jul 2011 10:29:00 EST

Filed under: Ferrari

Fiat has gone from a local automaker to a major industry powerhouse in a relatively short span of time, increasing its own market stake while taking over Chrysler to expand its global reach. But something's gotta give, figured the industry analysts, leading to speculation that one of its most valuable properties could be sold - at least in part - to raise capital for the rest.

Following much speculation that Fiat could begin selling off shares in Ferrari, the latter's powerful chairman Luca di Montezemolo has reportedly flat-out denied any possibility of an initial public offering on the open stock market.

Now, that's not to say that Fiat couldn't opt to sell all or part of Ferrari via other channels - say, privately to another automaker or group of investors. Montezemolo has been known, after all, to issue somewhat misleading statements, such as the repeated denial of an upcoming entry-level model right up until the introduction of the California. So we wouldn't quite put the issue to rest just yet, but we won't be calling our stock brokers with a standing order, either.

Montezemolo denies Ferrari IPO originally appeared on Autoblog on Fri, 22 Jul 2011 10:29:00 EST. Please see our terms for use of feeds.

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Williams F1 team considering IPO stock issue

Noah Joseph — Mon, 24 Jan 2011 08:57:00 EST

Filed under: Motorsports, Earnings/Financials

Rubens Barrichello tests the Williams FW32 with new Pirelli tires at Yas Marina Circuit in Abu Dhabi

What's the best way to make a small fortune in Formula One? Arrive with a large one. Williams has another idea though, and it's a radical one in the field of motor racing: The British outfit may float shares on the stock market.

Williams insists the idea is being considered in order to secure a long-term future (as its team principals are some of the oldest on the grid) and not as an effort to raise funds in the short term. After selling part of the team to Austrian investor Toto Wollf, it suffered from the departure of a number of sponsors at the end of last season. But the team insists its budget is secure for the coming championship, having recently announced a deal with Venezuelan oil company PDVSA that followed the signing of Venezuelan driver and reigning GP2 champion Pastor Maldonado to replace Nico Hülkenberg for next season.

The Williams group consists of more than just the F1 team, encompassing Williams Grand Prix Engineering as well as the hybrid development business Porsche used for the 911 GT3 R Hybrid, the development and construction of the Formula 2 chassis and separate operations in Qatar, which would ostensibly all be part of the IPO if the company decides to go ahead with the move. At the moment, however, Frank Williams and company appear to be dipping their proverbial toes in the water. Follow the jump for the official statement.

[Source: Williams | Image: Glenn Dunbar/LAT/Williams]

Continue reading Williams F1 team considering IPO stock issue

Williams F1 team considering IPO stock issue originally appeared on Autoblog on Mon, 24 Jan 2011 08:57:00 EST. Please see our terms for use of feeds.

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Report: Investment funds suing Porsche in U.S. for "short squeeze" fraud over VW

Jonathon Ramsey — Thu, 28 Jan 2010 10:58:00 EST

Filed under: Government/Legal, Porsche, Volkswagen, Earnings/Financials

The Porsche-as-hedge-fund escapade isn't fully resolved yet. Of course, the biggest denouement will be when Volkswagen finishes integrating the company early next year, but in the meantime, Porsche is still dealing with investor wrath after its stock market foray. A group of U.S.-based hedge funds is suing the Stuttgart carmaker for losses in excess of a billion dollars, claiming those losses came because Porsche misled them about its intent.

Porsche was coy about its stake in VW, and only disclosed its stock holdings in the company as required by German law. German law doesn't require a company to publicly declare cash-settled stock options as a share in the company. That means Porsche was sitting on shares it controlled that investors didn't know about, and investors read Porsche's statements on its intent as not having any interest in taking over VW. This, even though the company was knocking down doors all over Europe trying to get the VW law repealed...

When the extent of Porsche's holdings were found out, investors expecting VW's stock to drop had to cover their short positions buy buying a much smaller supply of stocks than expected, which drove VW's share price to intergalactic levels. And that's where the massive financial bloodletting happened. Porsche was already investigated and cleared by German authorities, who found that the company didn't break any disclosure laws. Redress in an American court, where the lawsuit was filed, could be just as difficult to come by.

[Source: Automotive News - sub. req'd | Image: Basheertome - C.C. License 2.0]

Report: Investment funds suing Porsche in U.S. for "short squeeze" fraud over VW originally appeared on Autoblog on Thu, 28 Jan 2010 10:58:00 EST. Please see our terms for use of feeds.

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REPORT: Toyoda family stock shares take $449M hit

Chris Shunk — Wed, 25 Mar 2009 08:28:00 EST

Filed under: Trends, Toyota, Earnings/Financials

The Toyoda family has felt the pinch of the global automotive crash in the worst possible place: their wallets. Toyota share prices have plummeted by a very substantial 46% in the past nine months, costing the Toyoda family hundreds of millions of dollars. Soon-to-be company president Akio Toyoda's 4.6 million Toyota shares has dropped $145 million; a fantastic decline, but less than half of his father's loss. Former company president and honorary chairman Shoichiro Toyoda has lost $304 million during the past nine months - enough money to buy over 10,000 loaded Camrys.

The Toyodas have a great deal of stock in the company Kiichiro Toyoda founded, yet the family only owns 0.8% off all shares. And while the Toyodas have lost quite a bit of stock value, the company scions aren't likely to sell off their shares. That means the family probably won't lose much real wealth in the long term, though a potential dividend cut could still cost the Toyoda's millions. Bloomberg expects Akio and Shoichiro to lose about $20 million in 2009 dividend payments, or enough money to make even the wealthiest automotive scions really, really sad.

[Source: Bloomberg]

REPORT: Toyoda family stock shares take $449M hit originally appeared on Autoblog on Wed, 25 Mar 2009 08:28:00 EST. Please see our terms for use of feeds.

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Kerkorian sells off another load of Ford shares

Jonathon Ramsey — Wed, 29 Oct 2008 10:01:00 EST

Filed under: Ford, Earnings/Financials

Just four months ago, Kirk Kerkorian had a cup out and was asking passers-by for some spare Ford shares. Although he only wanted 20 million of them, he was offered one billion. Turns out those folks trying to get out of the Ford ownership business might have been a bit more prescient than the Tracinda billionaire. After a couple more weeks of watching Ford's share price begin digging toward the center of the earth, Kerkorian seems to want out of Ford himself.

A week ago Tracinda shed 7.3 million shares, and now it has unloaded another 26.4 million at an average price of $2.01 per share. That's about $6 less than he paid for them. Kerkorian used a $600 million line of credit from Bank of America to finance the original billion dollar investment in Ford, using shares in his MGM casino for collateral. In addition to the loss on the Ford investment, MGM's stock price hasn't held up either, and that means he's had to commit more of the casino to B of A. Kerkorian's latest divestment takes him under 5% ownership of The Blue Oval, which means he doesn't have to divulge any more share sales, but we have a feeling it won't be the last.

[Source: Bloomberg]

Kerkorian sells off another load of Ford shares originally appeared on Autoblog on Wed, 29 Oct 2008 10:01:00 EST. Please see our terms for use of feeds.

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Volkswagen temporarily becomes largest company in the world

Jonathon Ramsey — Tue, 28 Oct 2008 18:58:00 EST

Filed under: Etc., Europe, Volkswagen, Earnings/Financials

The NFL season is clearly out of control, Audi just crossed the country in a bunch of diesels you can't buy here, and GM wants to "merge" with Chrysler. But it's not just America that's home to the madness: Ferrari might leave F1, Mitsuoka is selling this thing for €70,000, and today, for a brief moment, Volkswagen was the most valuable company in the entire world based on market capitalization. The reason: Porsche announced it would up its stake in the company to 75-percent. That blasted VW's €210 euro-per-share price up to €1,000 per share, making it more valuable than ExxonMobil and giving Ferdinand Piech reason to start practicing some lines from Scarface. The shares ended the day at €643, which is still pretty good for paper that could be had for less than €200 just about a month ago... Thanks for the tip, Kris!

[Source: Seeking Alpha]

Volkswagen temporarily becomes largest company in the world originally appeared on Autoblog on Tue, 28 Oct 2008 18:58:00 EST. Please see our terms for use of feeds.

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The most valuable carmaker in the world is... ta-da, Volkswagen

Jonathon Ramsey — Tue, 07 Oct 2008 15:59:00 EST

Filed under: Porsche, Toyota, Volkswagen, Earnings/Financials

As with this year's American football season, weekly surprises in the car industry are now standard fare. VW recently overtook Ford for the number three spot in global sales, and now the home of the Beetle and the Veyron has overtaken Toyota as the industry's most valuable company based on dollar-converted market capitalization. Just as eyebrow raising is the reason for it: Toyota's stock has dropped 5% to its lowest point in four years due to the usual suspects, while VW's stock has climbed a stratospheric 87% due to the fact that Porsche is busy gobbling up the company. As far as we're concerned, that makes Porsche the real story: one of the industry's smallest players - it sold less than 100,000 cars around the world last year and still set a personal best - is about to be the world's third largest car maker and, for a while at least, its most valuable. What a difference ~~a day~~ a Cayenne makes. Thanks for the tip, bazzz!

[Source: Bloomberg]

The most valuable carmaker in the world is... ta-da, Volkswagen originally appeared on Autoblog on Tue, 07 Oct 2008 15:59:00 EST. Please see our terms for use of feeds.

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DaimlerChrysler stocks skyrockets on talk of Chrysler sale

Frank Filipponio — Tue, 20 Feb 2007 06:50:00 EST

Filed under: Daimler, GM, Hyundai, Earnings/Financials

We have no idea who will end up with Chrysler once all this madness ends, but we can say that there are already quite a few winners in the process -- DCX stockholders.

While we all sat and played the Hyundai vs. GM vs. ? game, the stock price shot through the roof. Apparently in the minds of shareholders, any buyer would be better than Daimler at this point. The stock closed up four-percent, trading at its highest price since 2001. At the closing bell, the final price was 56.08 Euro (about $73.74) per share. We first mentioned rumors of the sale on Valentine's Day and within a few days the story had exploded into unconfirmed, yet very probable, negotiations between GM and DaimlerChrysler, with Hyundai appearing out of nowhere and then quickly dropping out. While we figured the buyout was probably not going to happen, and that pickups were the basis of the talks between GM and Chrysler, the rumors persist.

[Source: Reuters]

DaimlerChrysler stocks skyrockets on talk of Chrysler sale originally appeared on Autoblog on Tue, 20 Feb 2007 06:50:00 EST. Please see our terms for use of feeds.

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Mazda trounces Toyota, Honda, Nissan in stock market

Joel Arellano — Sat, 25 Mar 2006 17:05:00 EST

Filed under: Crossover, Mazda, Earnings/Financials

Bloomberg reports that Mazda, the fourth largest automaker in Japan, is currently ahead of its larger rivals in the stock market. The company attributes its stunning success to news of its upcoming utility vehicles, the CX-7 (pictured) and CX-9.

"Mazda's earnings growth will finally outpace other automakers, attracting investors this business year and next,'' said fund manager Hiroyoshi Nakagawa. "Hopes for new models are also driving the stock higher.'' Nakagawa is with Societe Generale Asset Management Co. in Tokyo, which oversees some of Mazda's shares.

Mazda's stock, advancing 30% so far this year, is also ahead of other automakers such as Renault SA (25%) and BMW AG (24%). Only Volkswagen AG beat Mazda with a 40% growth.

[Source: Bloomberg]

Mazda trounces Toyota, Honda, Nissan in stock market originally appeared on Autoblog on Sat, 25 Mar 2006 17:05:00 EST. Please see our terms for use of feeds.

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