Porsche is set to IPO in the next month or two and as one of the biggest European IPOs in recent history, there has been a lot of speculation about what the debut price will be. With so few IPOs in the post-pandemic era, it’s notoriously difficult to guess where the price is going to end up when it finally comes to it. So, in this article, we’ll examine some thinking and what factors could impact the price of this exciting new listing.
Initial Investor Interest
As with all of these high-profile listings, you can bet that Porsche has already begun conversations with a wide range of high-profile investors to try to test the market appetite. Reports from Bloomberg suggest that the initial estimate from large investors who have been approached will place the ballpark figure at around $85bn.
It’s difficult to judge how much of this value is predicated on the brand’s long-term value as opposed to the future expectations for the company – but regardless, this sort of figure would place the IPO in esteemed company as one of the largest that Europe has ever seen. This is on the back of a challenging macroeconomic picture as well, where the energy crisis has been hurting the automobile industry in a significant fashion.
Let’s look first at some of the key factors that could bring this valuation down when it gets to its initial listing:
Those are some of the headwinds, but now let’s look at the tailwinds in their favor.
What Could Bring the Value Up?
Here are some of the reasons for optimism that the valuation could get up as high as $85bn:
So, What Is Our Prediction for the Porsche IPO Price?
Taking all of the above into account, it’s clear that the valuation should be in the $50bn-$85bn range. Within that band, it’s very difficult to assess where it might end up exactly because we’ve had so few IPOs of this nature to compare it to in recent months. A lot will depend on the messaging around the listing and what the company chooses to do in terms of splitting the ordinary and preference shares.
Many believe that investors should show caution here and try to see past the brand to the company itself, and we think that is good advice. Porsche as a company is very different to the cultural impact they’ve had as a brand, and any IPO investors will have to keep that in mind as they decide on what they think is a fair price.
The information in this article is well-researched and factual. Still, it contains opinions also, and IT IS NOT FINANCIAL ADVICE and should not be interpreted as such, do not make any financial decisions based on the information in this article; we are not financial advisors. We are journalists. You should always consult with a professional before making any investment decisions.
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