> Another London-based analyst said: “[Porsche] is a hedge fund investing in just one stock [Volkswagen].”[0]
> Because of its heavy reliance on Volkswagen's manufacturing capabilities, Porsche knew it had to increase its control [of Volkswagen] to mitigate the risk of its production being affected. Porsche used debt to start buying Volkswagen shares on the open market. [1]
> All of the options-trading Porsche takes part in relates to its stake in VW, which it has built up from scratch over two years. Porsche used the options to hedge against the likelihood of VW’s shares rising after its interest was made public: they did, from about €40 to almost €180. [0]
They wanted to buy a chunk of VW. After they started doing so, they hedged against the stock price so that they wouldn't get screwed if the price of VW popped. Then the price of VW popped, and their options paid out big time. That doesn't make them a hedge fund, it just make them competent (and somewhat lucky).
> Another London-based analyst said: “[Porsche] is a hedge fund investing in just one stock [Volkswagen].”[0]
> Because of its heavy reliance on Volkswagen's manufacturing capabilities, Porsche knew it had to increase its control [of Volkswagen] to mitigate the risk of its production being affected. Porsche used debt to start buying Volkswagen shares on the open market. [1]
> All of the options-trading Porsche takes part in relates to its stake in VW, which it has built up from scratch over two years. Porsche used the options to hedge against the likelihood of VW’s shares rising after its interest was made public: they did, from about €40 to almost €180. [0]
They wanted to buy a chunk of VW. After they started doing so, they hedged against the stock price so that they wouldn't get screwed if the price of VW popped. Then the price of VW popped, and their options paid out big time. That doesn't make them a hedge fund, it just make them competent (and somewhat lucky).
[0]https://foreignpolicy.com/2007/11/14/porsche-makes-more-mone... [1]https://dailyinvestor.com/world/10426/incredible-story-of-ho...