Porsche rescues itself by buying VW stock

LOS ANGELES — Largely overlooked in the Detroit Big 3 financial crisis has been one of the most incredible examples of clever stock trading in modern history. And it happened at a car company!

Last month, Porsche AG surprised the world by announcing it had acquired a nearly 43 percent stake in Volkswagen AG with an option to buy 32 percent more. Without anybody noticing, Porsche, maker of scarcely 100,000 cars per year, had cornered a 75 percent position in VW, which cranks out nearly 6 million vehicles. And since nobody guessed how large Porsche's position was beforehand, short sellers suddenly got caught unaware, driving VW stock up. VW shares quintupled, peaking at more than 1,000 euros, and making VW, briefly, the most valuable company in the world.

Porsche found itself able to sell part of its position without having to cede control of the bigger carmaker.

Klaus Berning, a member of Porsche's board and head of sales and marketing for the company, said Porsche's acquisition of VW isn't about the money. Apparently it's about saving Porsche. "It is our guarantee that Porsche will remain Porsche."

Approached afterward, Berning elaborated. Apparently, Porsche is not on the verge of bankruptcy. Instead, the acquisition would allow the smaller automaker to rely on VW's considerable engineering capacity to help it develop a new hybrid drivetrain for its Cayenne SUV, as well as on other technological advances in development. "A company of our size needs a technological partner," he said.

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