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Porsche denies price manipulation as it sells 5% of its VW shares

The Porsche and Piëch families might have ironed out their personal differences but events within their businesses have escalated since Sunday when they announced they had amassed a further 31.5% in Volkswagen, pushing their ownership to over 74%.

However, controversy has centred on the fact that the 31.5% is in the form of cash settled options, purchased to hedge against price risks.

On the back of this, VW shares experienced a huge surge earlier this week. At one stage the price exceeded €1,000 per share, briefly making it the world's most valuable company.

This hedge-fund-like behaviour has led the German stock market regulator to investigate allegations of price manipulation.

However, in a statement, the company said it had not been active in the market during these share price movements. "Allegations of price manipulation by Porsche are therefore without any foundation whatsoever," it stated.

Porsche has blamed the artificial rise on speculative short sellers who were forced to buy VW shares in order to fulfil their delivery obligations.

Nevertheless, Porsche has also now confirmed that it intends to sell up to 5% of these cash settled options "to avoid further market distortions." The company warned that this might result in an increase in the liquidity of the shares.

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