Agency Report –
Stuttgart – The head of luxury car manufacturer Porsche on Thursday blamed the company’s delisting from Germany’s DAX stock market index on technical factors and said the brand would soon be re-listed on the top listing.
German exchange operator Deutsche Börse Group announced on Wednesday that Porsche was being downgraded from the top 40 blue chip company DAX to the MDAX listing of medium-sized companies. The changes will take effect on September 22.
Besides Porsche, German medical lab equipment maker Sartorius is also being dumped from the DAX, with digital company Scout24 – known for operating a major real estate market place – and engineering firm GEA to take their place.
“Deutsche Börse, according to its rules, only considers the freely tradable shares for the composition of the DAX – and this is relatively low for Porsche AG at just over 12%,” Porsche chief executive Oliver Blume told the Frankfurter Allgemeine Zeitung newspaper.
“The DAX will lose one of Germany’s most valuable companies,” he said, adding that considering Porsche’s overall market capitalization and the brand’s appeal, the company remains one of Germany’s major publicly traded firms.
Blume acknowledged that compared with other companies, Porsche may have lower market capitalization, but said it has a higher free float or number of shares available to the general public.
Due to these technical factors, Porsche narrowly missed out on staying in the DAX, he said.
But Blume noted that Porsche is undergoing a transformation, and he is confident that investors would continue to recognize the stock’s value.
With “iconic products” and profit programmes, he said, Porsche would achieve higher share prices again in the future.
“With Porsche’s new direction, we have a clear ambition to return to the DAX as soon as possible.”
Porsche went public at the end of September 2022, celebrating one of the largest IPOs in German post-war history. Just a few months later, the then highly profitable company was listed on the DAX.
Shares were launched at an issue price of €82.50 ($96) and rose to nearly €120 in the months following the IPO. Most recently, however, the share price had dropped to around €45.
Porsche’s DAX removal symbolizes the crisis facing the German automotive industry, which is struggling with declining profits. This has weighed on the share prices of companies in the sector.
