@krkm By 2008, the full effects of the Financial Crisis had hit public markets and it was seeming less than likely that Porsche could borrow enough money to buy up shares of Volkswagen. That fall, Lehman Brothers, Bear Stearns, and Washington Mutual collapsed. Almost every American bank received a cash infusion from the US Government to avoid insolvency. After a years of lax lending practices, banks stopped lending money. As a result, Volkswagen became one of the most shorted stocks on the market. By October 2008, almost 12.8% of the shares were being shorted with the hope that the price would fall and the shorters would make a profit. On October 20, the financial publication Barrons published a story about VW titled “The World’s Most Overvalued Stock” and surmised that Volkswagen shares would “likely drop like a Beetle pushed from a cliff” once Porsche stopped purchasing the company’s shares. The timing of this article couldn’t have been worse. On October 27 2008, Porsche dropped a bomb on the financial community: it had again raised its stake in Volkswagen -- now to 42.6%. Moreover, it had secretly purchased “cash-settled” options to purchase another 31.5% of outstanding Volkswagen shares. Combined, Porsche had now corned 74.1% of all Volkswagen shares! Moreover, after years of denying its intent to acquire Volkswagen, it now finally stated it intended to pursue a “domination agreement” -- or 75% of the shares. In doing so, the $12 billion sitting on Volkswagen’s balance sheet could be used by Porsche to finance this acquisition. For the short sellers, this was a disaster. Not only was Porsche continuing to buy up Volkswagen, which drove up its price, but since Porsche and the Lower Saxony government controlled 94.1% of the Volkswagen shares together, there were practically zero available shares on the market for the short sellers to cover their position. The Volkswagen share price shot up from $200 per share to $500 per share in one day. The following day, the shares skyrocketed to almost $1,000 per share. For a brief moment on that day, Volkswagen was technically the most valuable company in the world.

@anonymous уау