If you cheat, money will follow

Wolfgang and Wendelin set out from Stuttgart and transferred in Frankfurt and Shanghai. When they arrived in Jiangzhou, it was already the afternoon of the next day.

Zeng Xi picked up the exhausted two people at the airport and sent them to a hotel near the company. They agreed to rest for a day and talk again the next day.

Wolfgang "ran thousands of miles" non-stop and rushed to Jiangzhou in person. The main reason was that the plan formulated by Porsche had reached the most critical moment. Without this part of the option stocks of Leda Investment Company, it was doomed to fail.

It should be three years ago, in 3, that Porsche announced its intention to acquire Volkswagen.

When Porsche announced it to the outside world, it received cold looks and ridicule from the world. The world called it a snake swallowing an elephant and overestimating its capabilities.

Because, whether at that time or three years later, Porsche cannot be compared with Volkswagen in terms of asset size or sales revenue.

Porsche's size is about 1/3 of Volkswagen, which is still a high estimate.

The former is only a top star in the automotive field, while Volkswagen is a super giant in the field and enjoys super-national treatment.

Faced with cold looks and ridicule, Porsche pressed the ideal button, tapped the acceleration code button, and slowly accumulated strength.

Fast forward to 2007.

This year, the global economy was in a pre-crisis hot stage, hot money was flowing everywhere, and Porsche's net profit was as high as 67 billion euros.

67 billion euros is equivalent to approximately 107.2 billion U.S. dollars, setting a historical record and becoming the most profitable vehicle manufacturing company of the year.

Here, with an ideal positioning goal and strong financial support, Porsche began to make acquisitions again and turned its ideals into actions.

To successfully complete the acquisition, Porsche faces three mountains, each of which needs to be overcome and is very difficult.

The first mountain to climb is funding.

Although Porsche has increased its holdings several times over the past few years, it already holds 31% of Volkswagen shares. But in the face of a behemoth with a market value of 600 billion euros and more than 800 billion US dollars, 67 billion euros is still a drop in the bucket.

The second mountain to climb is the law.

Germany's "Company Law" stipulates that only by holding 75% of the shares of a listed company can one achieve absolute control.

However, due to historical reasons, 75% of the shares cannot control Volkswagen. Volkswagen is not an ordinary listed company, but an enterprise that enjoys super-national treatment.

German officials have formulated a bill specifically for Volkswagen.

The bill stipulates that if you hold less than 20% of the shares of Volkswagen, your voting rights will be calculated based on the actual shareholding ratio;

If the shareholding amount is greater than 20% but less than 80%, the voting rights are equivalent to the voting rights of 20% of the shares;

In other words, even if you hold 79% of the shares, you still cannot achieve control. Only if it exceeds 80% can you achieve absolute control.

However, the Lower Saxony state government, where Volkswagen is located, holds 20.1% of Volkswagen's shares, which completely blocks this road.

From a legal perspective, the shares held by the state government are owned by all taxpayers. To take over their shares, it must be submitted to a vote by the state assembly, or even more likely to require a referendum by the state's citizens.

Therefore, theoretically, it is an impossible task for Porsche to climb this mountain.

The third mountain is transparency.

Germany's Securities and Exchange Law stipulates that after the shareholding ratio of a listed company exceeds 30%, any increase in shareholding is considered a tender offer, and the offer must be announced to the outside world.

And Porsche already holds 31% of Volkswagen's shares. If this clause is touched, every step of increasing its holdings in the future will be made public, which is equivalent to conspiring in the spotlight.

It is precisely because of the existence of these three mountains that the whole world is not optimistic about Porsche and thinks it is just wishful thinking, like a rope tied to a chicken's butt - nonsense.

However, after creating a profit record in 2007, Porsche began to acquire Volkswagen shares in the secondary market in early 2008.

The shareholding ratio increased from 31% at the beginning of the year to 35.14% recently.

Faced with this situation, hedge fund managers all over the world were banging their clappers - ecstatically.

One after another, they gathered in the Frankfurt market and shorted Volkswagen shares in the market.

Generally speaking, if Company A acquires Company B, before the acquisition is successful, Company B's shares will be snapped up and the price will rise.

Company A acquires Company B, and if the acquisition fails, Company B's stock will plummet.

Obviously, because of these three mountains, hedge funds around the world believe that this is a transaction destined to fail. How long will it take to not go short now?

However, Porsche had to climb two mountains before taking action.

The first big mountain is funds.

In December 2007, Porsche successfully obtained a credit loan of 12 billion euros from 15 European commercial banks;

Coupled with the company's huge profits in 2007 and its own funds sufficient to complete the acquisition, funding issues are no longer a problem.

The second mountain is law.

As early as 2005, Porsche established a European holding company and embedded Porsche automotive assets into Porsche Holdings to circumvent German laws.

Later, Porsche Holdings filed a lawsuit with the European Court of Justice, claiming that the Volkswagen Act violated the EU's established principles of fair and equitable trading.

This prosecution is in the interest of relevant financial institutions.

In October 2007, with the joint operation of Wall Street and many European financial institutions, the European Court of Justice formally ruled that the Volkswagen plan was illegal, overturned this 10-year-old special law, and paved the way for Porsche to advance the acquisition. legal path.

The above two events are major events, and Porsche also announced them in a timely manner.

But the aggressive short-selling hedge funds turned a deaf ear and ignored it.

Because from the beginning of 2008 to the present, Porsche's stake in Volkswagen has always stayed at the 35.14% position line, which is still more than half the distance from the 75% holding line.

The long-term immobility is generally considered to be a hindrance to Porsche's acquisition and financial constraints.

At this time, short selling is bound to make money.

Little did they know that Porsche had made a surprising move and climbed the third mountain.

Germany's Securities Exchange Act stipulates that if you purchase stock options, you must pay the option premium based on the full price of the stock, that is, without using financial leverage, and you can decide on your own when to announce the option position.

In other words, you use the price of an existing house to buy an off-plan house in exchange for keeping the information confidential.

Once exercised, options become shares.

This clause basically allows Porsche to avoid making public announcements.

Hedge funds seemed oblivious to this rule.

After all, options, generally speaking in the futures category, are highly leveraged instruments that are both small and large.

Pay the option premium in full?

So why not just buy spot stocks?

It's just taking off your pants to fart and wearing a cotton-padded jacket to take a shower - unnecessary

It is precisely because Porsche took advantage of this blind spot in thinking that it achieved the effect of concealing the truth by paying the option premium in full.

By August, Porsche's total share of Volkswagen stock and option positions had reached 8%, only 65% away from a successful acquisition.

But the problem arises again. Less than 10% of the circulating stocks available for trading in the secondary market.

That's why Wolfgang came in person.