Incidentally, if we compare the prices of ordinary shares (VOW) and preferred shares (VOW3) of Volkswagen, the ordinary shares (VOW) currently (22 August) command higher prices.Ĭan another VW short squeeze occur? Data about the short interest of Volkswagen stock is not abundant, as the stock’s primary listing is on the Frankfurt Stock Exchange under the ticker symbol VOW and few websites provide this kind of information for German-listed shares.Īs for its American Depositary Receipt ( ADR) (ticker: VWAGY), the number of shares sold short decreased from 268,700, as of 15 July, to 267,500, as of 31 July, resulting in a 0.45% decrease during the 15 days ended 15 July. But, generally, preferred shares do not give any voting rights. Preferred shares mean that the owners of these shares have preference in dividend payment and asset allocation in case of liquidation. On the other hand, shares with the ‘VOW3’ symbol are preferred shares. Ordinary shares mean that their owners can get voting rights. The shares with the ‘VOW’ symbol are ordinary shares. Traders should also mind the difference between Volkswagen ordinary vs preferred share prices. However, since then, the price has progressively declined and continues to be on a downtrend as it has failed to make a higher high during that period.

It appears that the previous 2008 Volkswagen squeeze was considered by traders as an indication that the stock was sensitive to being squeezed again in 2021.Īs a result, on 18 March 2021, VOW stock rose to $357.4 a share. In 2021, the price of Volkswagen stock spiked during the so-called “meme stock” short-squeeze that affected the share price of companies such as GameStop (GME) and AMC Entertainment (AMC). Can a Volkswagen short squeeze happen again? This event is known as the VW short squeeze of 2008. On 28 October, the Volkswagen short squeeze price reached an all-time high of €1,005. Hedge funds would have to entice holders that owned the remaining 10% of the company to sell their shares.

Trading volumes spiked, as there was a supply-demand imbalance since neither Porsche nor the government were willing to let go of their shares. According to International Banker: “Ultimately, those hedge funds that had shorted VW stock ended up losing an estimated $30 billion from their trades.” Once they realised the position they were in, they started to buy the stock to cover their open short positions as it became clear that they could be victims of a Volkswagen squeeze. Investment funds had reportedly borrowed around 12% to 13% of the company’s shares. In March that year, the company revealed that it had actually upped its stake to over 40%, while it also held around 31.5% of the company’s shares in cash-settled options.Ĭombined with the 20% stake the German government owned back then, it meant that less than 10% of the company’s float was actually available and accessible to traders and investors in the open market. However, Porsche did not stop buying shares of VW as market participants expected. In 2008, short sellers started to bet against the stock as they realised that Porsche would start limiting its purchases after they amassed a 30% stake in VW. This resulted in the price progressively climbing to higher levels in the following months. The history of the 2008 Volkswagen short squeeze can be traced back to 2006 when Porsche SE decided to start acquiring a sizable stake in the German automaker. In this article, we analyse if a Volkswagen short squeeze could happen again, remembering what prompted a similar event in 2008. With the price of WV stock currently standing nearly 46% below its 2021 post-squeeze high, is it possible that a similar event can happen again? Back then, traders who frequented the Reddit messaging board Wall Street Bets coordinated efforts to pump the price of various stocks that institutional investors were shorting heavily.īy doing so, they prompted massive buying activity and managed to pull a Volkswagen stock squeeze that propelled the share price to its highest level since the historic 2008 Volkswagen squeeze. Volkswagen ( VOW3) stock became one of the targets of retail investors in the early 2021s during the so-called “meme stock” frenzy.

Volkswagen stock predictions: Analyst sentiment.

Can a Volkswagen short squeeze happen again?.US30 US Wall Street 30 (USA 30, Dow Jones)

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