He had little experience of car making, but he did bring expertise in investment management. They also slashed production costs, but most importantly, Mr Haerter used Porsche's cash to enter the financial markets. 'Wiedeking took the decisions, the risky decisions, to come up with new models,' says Arndt Ellinghorst, head of European automotive research at Credit Suisse.

Together with chief financial officer Holger Haerter they are credited with turning the company around. Then, in 1993, Wendelin Wiedeking was appointed chief executive. The recession of the early 1990s hit Porsche hard and some questioned if the company would survive. Volkswagen owns some of the biggest names in European motoring Seat, Audi, Lamborghini, Bugatti and Bentley. The Porsche family still owns the company their grandfather founded and now wants to own Volkswagen itself, a company 14 times the size of Porsche. He then founded his own company, which became famous for making superfast sports cars. The stories of Porsche and Volkswagen have long been intertwined.Īrndt Ellinghorst, head of European automotive research at Credit Suisseįerdinand Porsche designed the iconic Volkswagen Beetle in the 1930s, a car that became an emblem of Germany's economic success throughout the world. Now the German financial regulator, BaFin, is conducting an investigation into what it calls 'suspected market abuse.' Porsche denies any wrongdoing and says that it made no profit from the squeeze, but some hedge funds are crying foul. Hedge funds, who had gambled that the value of Volkswagen shares would fall are said to have lost between 10bn and 40bn euros. The value of Volkswagen stock rocketed to more than 1,000 euros, briefly making it the most valuable company in the world.

In October 2008, Porsche's takeover moves triggered an unprecedented stock market squeeze when it suddenly revealed it owned or had positions on more than 74% of Volkswagen shares. Porsche says its stock market trades are only for one reason: to take it towards its long term goal, the takeover of car making giant, Volkswagen. Industry insiders are only half joking when they call it a hedge fund with a carmaker attached. Last year it made six times as much on the stock market as it did making cars. Porsche is world famous for its iconic sports cars.īut car manufacturing isn't the only thing the company is good at. Making and selling cars is just one part of Porsche's business

Vw short squeeze