To go… or not to go public…
THAT is the question.
With the economy acting pretty wonky…
If you were a company on the cusp of going public – management better ask whether now is the right time.
It doesn’t take an economist to know that going public at this moment in time…
Would be a risk.
Of course, that’s a risk some companies are willing to take.
If an IPO is successful…
It often sets the company up for big things.
However, if the IPO is a bomb…
Well, it could be curtains for that company – or at least for management.
And for ONE company…
We’re about to find out.
There was a time when IPOs were as common as love bugs hitting your windshield in Florida (for those outside of the Sunshine State… you’re not missing much) …
But as of late, they’ve been few and far between.
Coincidentally, so are love bugs…
That said, German carmakers, Volkswagen (VWAGY) announced plans for an IPO…
However, not for it, obviously – but for the brand it acquired: Porsche.
Now…
This isn’t a new development.
Volkswagen started laying the ground to list Porsche all the way back in February…
However, Russia invading Ukraine created unfavorable market conditions – and so things didn’t seem to be set for success.
That may change soon…
Investors seemed primed for Porsche to go public – as reports are coming out that they’ve been lining up round the block to get their share of one of the carmaker’s most prized brands.
In fact, there have been more share pre-orders than there are shares on offer – a something that could help value Porsche at as much as $85 billion.
And seeing that luxury brands are some of the only ones STILL making money in our chaotic economy…
It seems that the sky is the limit.
In fact, the hunger to own a piece of Porsche is so fervent – that Volkswagen’s batting around the idea of opening up share sales to retail investors across Europe as well.
In this market – this is GREAT news…
However, in a booming market – this EXCEPTIONAL.
On this valuation alone – VW could fund its move toward EVs…
As the carmaker is looking to increase its investments in electric vehicles by 50% over the next five years.
Not only that…
With its goal of introducing new cars as well as moving into the software side of things – a successful Porsche listing would be more than welcome.
However, while MANY luxury brands are doing well right now…
Don’t expect this to become a trend.
Aston Martin’s (ARGGY) shares nosedived after the loss-making carmaker announced it was selling heavily discounted shares to new and existing investors to pay down debts and invest in new models.
I guess being known as James Bond’s brand just isn’t enough…
And seeing as those discounted shares have already lost over two-thirds of their value this year – Aston Martin could find itself on the outs.
However, if I’m VW – and I’m looking at all the enthusiasm for Porsche…
I’d pull the trigger.
All that being said…
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Because you don’t want to miss out on any potential winners.
However, the choice is yours…
Either way, do yourself a favor and keep your eye out for Porsche – it could be a GREAT move for you and your portfolio.
“Change is easy. Improvement is far more difficult.” – Ferdinand Porsche
