Shares in Morgan Stanley MS. As one analyst said: These new Porsches were essentially fancy Volkswagens with a Porsche engine dropped in.
In SeptemberPorsche announced it had bought a 20pc stake in VW. A Possible Explanation for VW's Inexorable Rise", Mr Warburton said he believed Porsche had now bought options on as much as 75pc of VW; that the daily volume that was being traded in VW was in fact just short-sellers, who were then borrowing stock from Porsche or its banks, Porsche short squeeze that Porsche was making money out of the transactions.
This maneuver of secretly buying shares would have been and still would be illegal in the United States. Even so, this weekend the reputations not just of Porsche and its advisers, but of regulators and corporate Germany as a whole, are badly damaged.
The news shot through the global hedge fund industry. Three weeks ago, in a note called "Fruit Machine: Again, Mr Warburton was first to unearth the truth.
It would seem that he had capitulated to Wiedeking and Porsche. In the mids, reports surfaced that the cars were accelerating erratically and causing serious injuries; Audi had to institute a massive vehicle recall in the US. While Porsche ponders its next move in silence, the extent of the damage of its move is beginning to emerge.
Sources close to Porsche insist that the company never intended to cause the rumpus and has acted entirely within the rules. But the statement screamed the opposite.
Understanding Short Squeezes Before you can understand short squeezes, you have to understand how short selling works. It was the ultimate squeeze.
Three weeks ago, in a note called "Fruit Machine: Moreover, Porsche owed money to 15 different banks, each of which could bankrupt the company if it so wished. Porsche was left scrambling for a white knight to save it from its financial woes. If a company is not able to grow, it is not able to survive.
The only thing they underestimated was the scale of the fallout," said an insider. He'll have to wait his turn as he tries to sell, because others are also clamoring to get rid of their stock, and there's no limit to how high the stock could climb. PA all tumbled on Tuesday with traders saying there was speculation that the banks might be caught on the wrong side of trades involving Volkswagen.
When Ryan declared he would settle with the shorts at his price, the whole financial system reeled: What Porsche needed was a bailout. SocGen could not immediately be reached for comment, but earlier on Tuesday said it was sticking with its third-quarter earnings forecast.
Meanwhile, VW's shares were attracting real hedge fund investors as well as Porsche. The theme of David and Goliath is one of his favourites, while he shows a withering lack of respect for politicians. Even so, the questions wouldn't go away.
It was the ultimate squeeze. Instead, they would only invest in Porsche after it had cleaned up its finances and resolved its situation with Volkswagen. Analysts and traders said the stampede was historic for German large caps, but they could foresee VW shares continuing to rise or stay at current levels.
Porsche, he adamantly stated, would not be trying to take over the company: Porsche was at the verge of completing one of the most audacious acquisitions ever. Live by the sword, die by the sword I suppose. Combined, Porsche had now corned After decades at the company, he had transformed second-tier maker of unreliable German cars into a stable of powerhouse automotive franchises with over a hundred billion dollars of sales per year.
By Octoberalmost Stung at being caught out in its clever game, Porsche dismissed Mr Warburton's views as "fairy tales". To say this was a conflict of interest would be an understatement. Oct 30, · The result: instant short-squeeze. The German state of Lower Saxony owns a 20 percent stake in VW, which it said it would not sell.
That left precious few shares available for anyone else. Oct 29, · Shares in carmaker Volkswagen nearly halved on Wednesday after controlling shareholder Porsche took steps to ease a squeeze on shortsellers who more than quadrupled the price of the stock in days.
Oct 30, · The result: instant short-squeeze.
The German state of Lower Saxony owns a 20 percent stake in VW, which it said it would not sell. That left. Nov 01, · Porsche crashes into controversy in the ultimate 'short squeeze' For old-timers, the "short squeeze" at the Stutz Motor Company is a favourite from financial folklore.
Oct 28, · Porsche denied it was manipulating the market and said that the market had mixed up cause with effect. But when the short squeeze comes.
A short squeeze is a rapid increase in the price of a stock that occurs when there is a lack of supply and an excess of demand for the stock.  Short squeezes result when short sellers cover their positions on a stock, resulting in buying volume that drives the stock price up.Porsche short squeeze