How Porsche Owns Volkswagen and Volkswagen Owns Porsche

Video written by Ben Doyle

[ricequackers]

In the late 2000s, Porsche was described as "a hedge fund that just happens to make sports cars on the side". This is exactly why. 😁

[TheMrFabian]

The story how Volkswagen became the most valuable company is actually even better. Volkswagen was not very well off at the time due to the financial crisis and short-sellers were all over it. At that time they had open positions for 12% of all common stock. However, Porsche had bought so many shares, that only 6% of shares were freefloat, thus creating a giant short-squeeze, making Volkswagen the original rich-people's gamestop.

[Toasttw]

Fun fact:
they just play this video on repeat in Guantanamo bay for any german speakers until they just can't take the pronunciation anymore.

[Finkelfunk]

We actually talked through this in our economics class in uni last year. Basically this was an ingenious strategy by the Porsche/Piech family to take control over the biggest car manufacturer in the world despite not even being able to afford it. Our professor actually ranted about how stupid economics journalists were when they wrote articles about how "Volkswagen bought Porsche because they went bankrupt and Volkswagen now controls them".

[signbear]

As the owner of a Porsche, I can confirm my car owns me.

[uqde]

did you just pronounce "porsh" wrong and called the beetle extremely ugly in one video?
-me, a furious german

[Chucklet]

"1937 and berlin is a combo of date and location that goes together like peanut butter and Hitler" is one of the best jokes you've made on this channel. Well done.

[sailorstu]

Don't forget, they both own Audi, and Audi owns both of them.

VW also owns Bentley, and Audi owns Lamborghini.

They also own more additional car companies than I can count.

[MissDatherinePierce]

The Volkswagen Act is actually still in place (the German wikipedia article is very long in the EU section) and the holder of the 20, 2% shares is technically not the Federal Republic of Germany but the state of Lower-Saxony. The only thing that really changed is the section that no matter how many shares you own you could only act as if you had 20%. This has been abolished. But the 20, 2% in shares remain with the state. They also kept the 4/5 majority which I honestly appreciate as someone who lives in a region that depends on the jobs and Porsche has in the past threatened to bleed the VW productions facilities out and to close some of them to recoup their losses.
Btw there is also the Volkswagengroup which is the same to Volkswagen as Porsche SE is to Porsche AG. This can get difficult if you work for them and you want to switch positions between the group and the brand.

[namenamename]

"Porsche" is said so often in this video, I bet it was a delibertate choice to bait people into correcting Sam's pronounciation. On that note, "Porsche" is a two syllable word, it doesn't have a silent e at the end.

[JackJackProductions]

Sam, I can't believe you do not know how to pronounce Porsche

[tremondial]

Porsche also received a royalty fee for every VW Beetle ever sold. And since the Beetle at its time was the most sold car in the world, this fee amounted to a lot of money. This is how Porsche was able to buy so many VW shares and service such a large debt.

[Caretoexplainwatchamean]

Can we just talk about how he called the beetle "ugly"?
I appreciate every discussion and I gladly accept different opinions. But this is the first time I ever heard someone say that.

[quintessences]

This reminds me of the equally legally confusing corporate structure that is Pokémon. Please do a video

[lonestranger]

Correction right off the bat: The Chrysler Corporation no longer exists, and therefore cannot own other brands or companies. Stellantis owns the Chrysler & Dodge brands, the FIAT company, and the Maserati company. Today, neither Chrysler or Dodge exist as companies, they're merely brand names under Stellantis. This same arrangement existed during the time of Stellantis's predecessor, Fiat Chrysler Automobiles.

[shanemooon]

This is one of the best examples of how money is basically fake and does not matter.

[juliane__]

You missed the whole infighting thing around Piech and Wiedeking. Piech is a descendand of Porsche and as CEO of VW owned a big portion of Porsche SE, not AG. You could make a way bigger, actually funnily confusing video out of it, that is maybe worth the ad at the end.

[YvonTripper]

This is a "reverse takeover" and is actually pretty common. A company buys a business, but instead of paying the owners of the business in cash, they get paid in shares of the buyer. This makes sense where the buyer doesn't have a lot of spare cash but is able to convince the owners they have a good plan to make both their own company and the business they are buying more profitable in the future.

But I've also seen it happen where the buyer's board of directors realizes their business is too small to be profitable, but instead of selling their assets off like responsible directors to make the shareholders whatever they can, the board instead tries to acquire another business and hope the two businesses together will be big enough to start making money. This rarely works and just dilutes the company's existing shareholders, but in the meantime the directors get to keep their jobs.

[DZ]

Props to HAI for showing the symbol and not being fearful of demonetization!

[sophiaisabelle]

We appreciate your insights. These car brands are absolutely intriguing to learn about.