Volkswagen stocks soar: Porsche investment sparks probe

Volkswagen Europe’s largest car-maker shares surged on news that Porsche SE was planning to raise its share in the car manufacturer to 75 percent. Wolfsburg the Volkswagen common share prices were sent soaring over four times it value. Volkswagen are also the shortest stock on in the German benchmark DAX index.

The common share price in Volkswagen jumped as high as 296 billion euro’s ($370 billion) this price exceeding Exxon Mobil Corp’s $343 billion in New York yesterday at close according to Bloomberg.

The huge gains followed the announcement made on October 26 by Porsche to increase its holding in Volkswagen from 42.6 percent to 75 percent, these spurring short-sellers to buy from a shrinking pool of stock to close their positions.

Now BaFin are monitoring Volkswagen but have not as yet began a formal probe, although the regulators will investigate, this has angered some financial experts, who believe that the investigation should have already been underway claiming that it was without doubt an example of market manipulation and that the Porsche stake-building process is vague.

Source: Bloomberg