Porsche Involved In $1 Billion Lawsuit Over Failed VW Takeover

Porsche SE, maker of the 911 sports car, was sued by short sellers in Volkswagen AG stock who claimed Porsche secretly cornered the market in Volkswagen shares and later caused them more than $1 billion in losses.

The suit was filed yesterday in Manhattan federal court by Elliott Associates LP, Glenhill Capital LP, Glenview Capital Partners LP and other short sellers. It follows the failed effort by former Porsche Chief Executive Officer Wendelin Wiedeking to take over Volkswagen, which makes more cars in a week than Porsche does in a year. Volkswagen, Europe’s largest carmaker, is now acquiring Porsche’s sports-car business.

The short sellers claim that Porsche misled investors by denying through much of 2008 that it intended to acquire Volkswagen and by using manipulative trades to hide its stock positions. Stuttgart, Germany-based Porsche said in October 2008 that it controlled most of Volkswagen’s common stock, causing the shares to surge as short sellers raced to buy shares borrowed in a bet that the Volkswagen stock would fall.


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Dustbuster - 1/26/2010 12:49:04 PM

+2 Boost

I didn't get a guaranteed payout for investing my money (an inherent risk) - I'll sue everyone!

009load - 1/26/2010 1:26:30 PM

-2 Boost

That's right. Suing is one of the functions of capitalism. Live with it. Additionally, if Porsche is proven to have misled investors, the investors do have recourse. Even laymen like myself saw that something wasn't right, when Porsche attempted to overtake VW.

theoptimisticpessimist - 1/26/2010 7:28:11 PM

0 Boost

Wendelin Wiedeking sucks!

uhn2000 - 1/26/2010 8:14:20 PM

+2 Boost

Greed killed Porsche. This will be the end of a once independent and storied turn around automaker. It really turns me off from the brand.