Short Interest In Volkswagen: The Volkswagen Short Squeeze of 2008Īs we got later into 2008, the short interest in Volkswagen had been healthily rising, you could say. Well, maybe I do know who… (Shout out to /r/WallStreetBets)Īnother important note: Porsche was making it clear at this time that they were NOT attempting to take over Volkswagen. I mean, who the heck is buying a Porsche in the midst of a recession? Side Note About Luxury Cars In The Great Financial CrisisĪs you can imagine, a company like Porsche was hit even harder during the financial crisis. So indirectly, Porsche all of a sudden had the ability to be in control of 74% of Volkswagen. THEN, they took that stake all the way to 44% – WITH options to buy 30% more.
Then, come October of 2008: They took their already thick stake to 30%īut WAIT. Porsche!īefore the madness that was 2008: Porsche had been a huge shareholder in Volkswagen. In late 2008, a short bet on stupid little Volkswagen seemed like a no brainer. Chrysler filed for bankruptcy right around then too. And by 2009, GM had OFFICIALLY entered bankruptcy. But by December of 2008, GM had to be bailed out by the US government. Up until 2008, General Motors had been the largest automaker in the world for literally over 70 years. The Automotive Industry In 2008įor reference, in 2008, the whole auto sector was considered to be a pretty sexy short trade. Like a ticking time bomb, soon-to make a lot of short sellers rich. So with this situation, it made Volkswagen an EVEN MORE attractive short candidate as the financial crisis unfolded. This left its share price at a steady and surprising €300. They were already struggling financially, and in the midst of the crisis, of course, demand for new cars plummeted.ĭespite its messy financials, Volkswagen had reported several quarters of better than expected earnings. Even before the crisis, Volkswagen was quite thoroughly in debt. Or another way of looking at it: Volkswagen was viewed as a very sexy short candidate. At this time, Volkswagen was increasingly being viewed as a potential bankruptcy candidate. It was the midst of the worst financial crisis since the Great Depression, you’ve heard about it. Let’s immerse ourselves and begin our story… What Caused The Volkswagen Short Squeeze of 2008?
This was the Volkswagen Short Squeeze of 2008. In 2008, the world markets saw the absolute largest short squeeze in history. (Special shoutout to Citadel Capitol) What Was The Biggest Short Squeeze Ever In History? And you know, being on the wrong side… is a rather un-thrilling position. Being on the right side of a short squeeze is a very thrilling position. Basically: it’s a big game of fast-paced price movements, occasional hedge fund “chicken”and a whole lot of potential. In short form (not a pun) – A short squeeze is when a stock aggressively increases in price causing short sellers to have to cut losses and exit their positions, inadvertently further driving up the price per share of said stock.
Let’s take a look at the details that led to the alrighty Volkswagen short squeeze of 2008!ĬLICK TO WATCH THE IMMERSIVE VIDEO VERSION OF THIS STORY So… What is a Short Squeeze? The specifics about this story are truly insane.
Volkswagen short squeeze series#
After a series of clever, intense moves, this all set the path moving for Volkswagen to briefly become the most valuable company in the entire world. This was, and still is considered, the biggest short squeeze in history! In late 2008, amidst the global financial crisis: Porsche took a swing in the world of financial maneuvers. What Was The Volkswagen Short Squeeze of 2008?
0 kommentar(er)
