Porsche’s Hedge Fund Beef Continues, As They Launch Two Rubbish-Looking New Cars

One of the most heated and vehement spats of the financial crisis, between Porsche and various hedge funds, is set to continue as the funds mass together to launch a legal attack on their smug nemesis. If you take how angry you are at Fred Goodwin and multiply that by a hundred, then clothe it in a Brioni suit, that’s sort of what a wronged hedge funder looks like. Be very afraid.

A quick recap: various hedge funds bet on a fall in VW’s share price last year, when Porsche revealed that – tada! – it actually owned the company after a creeping acquisition. Suddenly there were much fewer shares than previously thought, and the price was driven up 400% through a mad dash for them, so not quite the fall they predicted. The fallout was that VW staff cashed in their shares and sailed off into the sunset, Adolf Merckle lost so much he killed himself, and Porsche denied any manipulation of the market, though obviously their new acquisition has performed nicely out of this debacle – Porsche made €6.8bn from VW options trading, compared with €1bn from cars driven down Kings Road by guys called Stefan and Ollie.

The hedge funders are incensed, and are now having a mother’s meeting at their trade body AIMA to start “exploring what options might be open”, i.e. “let’s try and sue their asses off”. No actual lawsuits are expected until the summer, as the funds are waiting to see if Bafin, the German financial watchdog, condemns Porsche for manipulation, but they’re expected not to.

Porsche’s revenue sank 13% in the last six months, so they’re targeting the crucial “emissions-conscious, ugly-SUV fanatic with a £40,000 budget” demographic that is so coveted during a recession, with their diesel version of the somehow simultaneously bland and obnoxious Cayenne. Their other development is the Panamera, which thankfully goes back to their “sweet fruity cocktail + exotic destination x Italian phonetics” naming formula, but unfortunately looks like a frowning, self-hating Aston Martin dreaming of being a cheap Toyota. “Porsche considers itself well-armed to withstand a very difficult operating environment,” the company said. Well, just as long as they keep playing the markets – their cars don’t look ready to do it.

Posted by Ben Beaumont-Thomas in Green Rush | March 16, 2009 1:17PM |