Volkswagen, the iconic German automaker, offers investors two distinct stock options: ordinary shares (VWAGY) and preference shares (VWAPY). As an investor, it’s crucial to understand the differences between these two types of shares and how they align with your investment goals. Additionally, Volkswagen’s ambitious electric vehicle strategy and ownership structure play a significant role in determining the company’s future prospects. In this comprehensive guide, we’ll explore the key factors to consider when deciding which Volkswagen stock to buy.
Overview of Volkswagen Stock Options
Volkswagen offers two main types of shares for investors: ordinary shares and preference shares. While both represent ownership in the company, they come with different rights and privileges.
Ordinary shares (VWAGY) provide shareholders with voting rights at the company’s annual general meeting (AGM). However, these shares have experienced a significant price decline, falling close to 48% from recent highs. Despite this, some investors may find value in the voting rights associated with ordinary shares.
Volkswagen’s ordinary shares, traded under the ticker symbol VWAGY on the OTCMKTS exchange, offer investors voting rights at the company’s AGM. This allows shareholders to have a say in important corporate decisions, such as the election of board members and approval of major transactions.
However, it’s important to note that Volkswagen’s ordinary shares have experienced a significant price decline, falling close to 48% from recent highs. This decline may be attributed to various factors, including the impact of the emissions cheating scandal and the company’s ongoing transition towards electric vehicles.
In contrast, preference shares (VWAPY) do not provide voting rights but offer priority in receiving dividends. These shares have historically traded with higher volume and liquidity compared to ordinary shares, making them potentially more attractive for investors focused on trading flexibility.
Volkswagen’s preference shares, traded under the ticker symbol VWAPY, have consistently demonstrated higher trading volume and liquidity compared to the company’s ordinary shares. This increased liquidity can be advantageous for investors who value the ability to quickly buy or sell shares without significantly impacting the market price.
| Share Type | Ticker Symbol | Voting Rights | Dividend Priority | Liquidity |
|---|---|---|---|---|
| Ordinary Shares | VWAGY | Yes | No | Lower |
| Preference Shares | VWAPY | No | Yes | Higher |
Volkswagen’s Electric Vehicle Strategy
Volkswagen has embarked on an ambitious electric vehicle (EV) strategy, aiming to become a global leader in the EV market. The company plans to invest heavily in the development and production of electric vehicles, with the goal of surpassing Tesla, the current market leader.
Volkswagen’s EV plans include the introduction of new models, such as the ID.4 electric SUV, and the establishment of dedicated EV production facilities. The company’s commitment to electrification is expected to drive growth and potentially boost its stock value in the long term.
Plans to Surpass Tesla by 2025
Volkswagen has set an ambitious target to match Tesla’s sales by 2023 and potentially surpass the American EV maker by 2025. To achieve this goal, the company plans to open six gigafactories in Europe by 2030, significantly increasing its EV production capacity.
Additionally, Volkswagen is making “massive” changes to its EV program in response to the push for more electric vehicles in the United States, led by President Joe Biden’s administration. These changes are expected to help Volkswagen compete more effectively in the growing US EV market.
ID.4 Electric SUV Launch
One of Volkswagen’s key EV offerings is the ID.4 electric SUV. This highly anticipated model boasts a driving range of 248-342 miles on a single charge, making it a competitive option in the electric SUV segment.
The ID.4’s launch is a significant milestone in Volkswagen’s EV strategy, showcasing the company’s commitment to developing high-quality, practical electric vehicles that cater to the needs and preferences of modern consumers.
Ownership Structure and Bullish Investors
Volkswagen’s ownership structure is another important factor to consider when evaluating the company’s stock. Porsche Holding Co, a subsidiary of Porsche Automobil Holding SE, is the majority shareholder of Volkswagen AG.
Porsche Holding Co, traded under the ticker symbol POAHY on the OTCMKTS exchange, holds a majority stake in Volkswagen AG. This ownership structure provides stability and long-term support for Volkswagen’s strategic initiatives.
Notably, renowned investor Michael Burry, known for his successful bet against the housing market prior to the 2008 financial crisis, has taken a bullish stance on Volkswagen. Burry’s investment firm, Scion Asset Management, has purchased shares in Porsche Holding Co, demonstrating confidence in Volkswagen’s future prospects.
Volkswagen AG’s Business Segments
Volkswagen AG operates through various business segments, each contributing to the company’s overall performance and potential for growth. Understanding these segments can help investors assess the company’s diversification and resilience.
- Passenger Cars and Light Commercial Vehicles: This segment focuses on the development, production, and sale of passenger cars and light commercial vehicles. It includes popular Volkswagen models such as the Golf, Tiguan, and Passat.
- Commercial Vehicles: Volkswagen’s commercial vehicles segment is responsible for the development, production, and sale of trucks and buses. This segment caters to the needs of businesses and public transportation providers.
- Power Engineering: The power engineering segment develops and produces large-bore diesel engines, turbomachinery, and propulsion components. These products are used in various industries, including marine, energy, and industrial applications.
- Financial Services: Volkswagen’s financial services segment offers a range of services, including dealer and customer financing, leasing, banking, insurance, and fleet management. This segment supports the company’s core automotive business by facilitating vehicle purchases and leases.
Impact of Emissions Cheating Scandal
Investors must also consider the impact of Volkswagen’s emissions cheating scandal, which came to light in 2015. The company admitted to installing software in its diesel vehicles that manipulated emissions tests, resulting in a significant settlement cost of over $15 billion.
While Volkswagen has taken steps to address the issue and rebuild trust, the scandal has had a lasting impact on the company’s reputation and investor confidence. Prospective investors should carefully evaluate the company’s progress in regaining consumer trust and navigating the legal and financial consequences of the scandal.
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