Monday's Headlines: Volkswagen Set To Spinoff Porsche

Monday's Headlines: Volkswagen Set To Spinoff Porsche

Here were the biggest movers in the MyWallSt shortlist on Friday:

Moving Up ⬆️

Nordstrom (JWN) +2.9%

Retail Opportunity Investments Corp (ROIC) +2.2%

Trex (TREX) +2.2%

Netflix (NFLX) +2.0%

The Home Depot (HD) +1.6%

Moving Down ⬇️

FedEx (FDX) -21.4%

Peloton Interactive (PTON) -8.8%

Redfin (RDFN) -8.8%

Farfetch (FTCH) -8.2%

Chegg (CHGG) -7.8%

Here are the stories that you need to know ahead of market-open today, Monday the 19th of September.

Volkswagen to Spinoff Porsche for $71.5 Billion 🏎

German automaker Volkswagen is planning to spin off its Porsche division in what could be one of Europe’s largest ever IPOs. The company is targeting a valuation of around €75 billion ($71.5 billion) after the board of directors announced on Sunday that it would list shares between €76.50 and €82.50.

Volkswagen and Porsche have always had a strong relationship, going back to when Porsche’s founder, Ferdinand Porsche, designed the first Volkswagen Beetle. In 2009, the companies reached an agreement to merge — a move that was completed in 2011.

Porsche shares will be divided into 455.5 million preferred shares and 455.5 million ordinary shares, adding up to 911 million — a playful nod to the company’s most iconic car. Just under 114 million non-voting shares are planned to be sold, raising around $9 billion at the top of the range.

It’s been a very quiet year for public offerings, however, the Porsche brand has attracted interest, with billions of dollars already pledged by sovereign wealth funds and institutional investors. A holding company controlled by the Porsche-Piech family is going to purchase 25% of the shares.

Trading is set to begin on the 29th of September on the Frankfurt exchange, with half the proceeds to be paid out to Volkswagen shareholders as a special dividend.

Schultz Reveals His Starbucks Bucket List 🪣

Less than a week on from unveiling Starbucks’ (SBUX) reinvention roadmap, CEO Howard Schultz has been speaking about his plans for the end of his reign as the coffee chain’s chief executive. This will mark Schultz’s third time handing over the reins to somebody else, and he insists it will also be the final time.

According to the company, Schultz will formally step down from his role in March of 2023, as incumbent CEO Laxman Narasimhan takes over. Schultz remarked:

“There has to be one leader of Starbucks. It will not be me. It’ll be Laxman. I’ll be on the board, but I’m only here if and when he needs me, and he’ll be the leader of the company.”

Despite this hearty vote of confidence, Schultz has certainly set a high bar for Narasimhan with lofty sales and profit expectations unveiled last week. As he begins his final push with the company, Schultz has pointed to leveraging technology and growing the firm’s footprint in China as two key areas that will propel Starbucks to new heights.

Starbucks saw its stock rise on the back of its reinvention plans last week, as investors appeared to rally behind Schultz and co.’s vision for the company. Now, as Schultz continues to reveal more details about what Starbucks’ future will look like, hope remains high amongst shareholders that the right decisions have been made to return the stock closer to all-time highs witnessed in mid-2021.

Starbucks currently sits just over 27% of its all-time mark and is down close to 22% year-to-date.

Uber Suffers Security Breach 🚨

Late last week, Uber endured a widespread security incident that forced the company to shut down its internal communication and development tools. Management talked down the breach, claiming that personal customer information — such as trip history — was not compromised.

The hack originated from the workplace collaboration tool Slack. A person who claims to be the hacker told the New York Times that they texted an employee, masquerading as an IT worker, and convinced them to hand over their passwords, gaining access to Uber’s internal systems. The hacker would go on to circulate messages and screenshots of the databases that were compromised. They also claim to have gained access to security vulnerability information on the company’s systems, potentially facilitating further breaches in the future.

The timing of the breach is a cruel irony for Uber, whose CEO Dara Khosrowshahi, appeared in court on Friday to defend the company over a security incident in 2016 that led to the exposure of personal information of 57 million customers and drivers. While the hackers' story has not been corroborated, if true, it exposes the most vulnerable aspect of a company’s cybersecurity processes: its people.

Uber stock was down 4% on Friday on the news, and down a further 2% in pre-market trading today. The ride-hailing pioneer is one of the poster boys for disruptive technologies after putting the taxi industry on its ear. However, the company was also a poster boy for growth at all costs sales tactics, which resulted in plenty of revenue, but also significant losses. Its primary focus is now its path to profitability, which was buoyed by becoming free cash flow positive in its most recent quarter. While an iconic brand, Uber is yet to prove to investors that it is able to grow profitably, explaining its underperformance since IPO.

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