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It’s a Porsche — no, it’s a hedge fund
Porsche on Monday revealed it earned three times as much money from trading derivatives as it did from selling cars, prompting accusations it was acting more like a hedge fund. The German luxury sports carmaker said €3.6bn ($5.2bn) of its €5.86bn pre-tax profit in the year to July was from share options. Stripping out the €521m it made from revaluing its 31% controlling stake in Volkswagen and €702m from its share of VW’s profits, Porsche made at most just €1.05bn from its “core” carmaking business. “It does look like a hedge fund,” said Stephen Cheetham, analyst at Sanford Bernstein. The FT’s Paul Betts says nobody is quite sure how Porsche made all that money from share options, though it seems to have bet on VW’s shares rising. Not been a bad bet, he says, but the question is, what happens now that credit markets are souring and VW looks very expensive?
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