A massive stock price surge in shares of Volkswagen after Porsche's weekend news they'd be snagging a 75% share of the automaker, has briefly allowed VW to stake the claim as the world's largest company by market capitalization, passing oil giant Exxon Mobil. Volkswagen continued to climb Tuesday as short sellers rushed to cover positions with VW shares rising as much as 93% on Tuesday in what we're terming the craziest short sale of all time. With mid-day gains of "just" 50%, the stock is trading about five times higher than lows reached in January. Who knew Porsche could still cause such a stir? Whatever — it won't last long.
Since it's just short-seller covering positions, and sales are only up 3.9% (although that's not too shabby in these times), we're expecting the price to come back down to earth shortly.
But, for the moment VW shares, with a free float estimated to be as low as 5% with Porsche and the Lower State of Saxony holding much of the company, were at its high of Tuesday worth 295 billion euros, or $367 billion. Exxon Mobil closed Monday with a market capitalization of $343 billion. Quick, Congress, get to the floor and pass another tax break for "Big Oil!" We'll teach the Germans nobody pushes our oil companies around. [Marketwatch]
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