The main thing is to cash in – Volkswagen offends all small investors

The sports car manufacturer Porsche has had the largest IPO since the T-Share - and that was at least a quarter of a century ago. But unlike Telekom, which was able to crown its debut with a whopping price jump, Porsche has done anything but a roaring IPO.

At 84 euros, the first rate was not even two percent above the initial rate. That may look passable in the current stock market environment, but it's clearly not a convincing signal for a new issue of this size. Normally new issues are offered in such a way that the first subscribers can make a profit of ten percent.

Especially since the expectations were particularly high in this case. After all, Porsche is one of the best-known German car manufacturers, whose luxury cars are in demand worldwide as a status symbol. From a company with such an iconic brand, one expects above-average performance even when going onto the floor.

The author of these lines has therefore subscribed and surprisingly even received a full allocation of the desired 30 shares. This is not usual: Shares are rationed for much-coveted stock market debuts.

While the parent company Volkswagen now classifies the IPO as a success and celebrates itself for being able to “capital market”, the reality for small investors looks different. Instead of being able to post a handsome profit, they had to worry in the first few hours of trading that the price would fall below the issue price. The suspicion therefore arises that Volkswagen fully exploited the price range and was mainly focusing on its own cash register.

An initial public offering (IPO) is always about taking into account the interests of everyone involved. The company that goes public wants the highest possible price to bring in money for new investments or a handsome return for the old owners.

The subscribers, on the other hand, tend to prefer a lower price because they can then expect price gains. These two interests must be reconciled.

A botched IPO is not only bad for the company's image, it can also become a problem later if a company wants to sell more shares but has upset the shareholders too much. This is all the more true with an IPO that sends such a big signal.

In Germany, equity culture has still not fully recovered from the later Telekom disaster. Many people continue to distrust the stock market and thus forego an important return factor, which is problematic in terms of retirement provision and prosperity.

When looking at the order book, Volkswagen and the consortium banks must have seen that small investors in particular subscribed to Porsche. It would therefore have been wiser not to exhaust the price range to the full, but to choose a slightly lower issue price in order to show what stocks can do on the first trading day: namely price gains.

The car company has decided differently and thus done further IPOs a disservice. In future, small investors will carefully consider subscribing for share certificates if even a share like Porsche cannot take off. Volkswagen didn't do equity culture any favors with this kind of IPO.

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