The performance of ordinary and preferred shares of Volkswagen AG diverged widely during the past year: while the price of ordinary shares declined further toward the end of the year from its level at December 31, 2008, the price of preferred shares rose substantially. One of the reasons was the changed shareholder structure resulting from the steps taken toward the creation of an integrated automotive group with Porsche. Because of a further reduction in the proportion of ordinary shares in free float, Volkswagen AG preferred shares have replaced ordinary shares in the DAX since December 2009. The performance of preferred shares in the second half of the year had increasingly fed expectations that this was a possibility.
SHARE PRICE DEVELOPMENT FROM DECEMBER 2008 TO DECEMBER 2009
Index based on month-end prices: December 31, 2008 = 100
At first, neither class of Volkswagen shares was immune to the overall development in the equity markets in the first quarter of 2009. Following a volatile start to the year, influenced in part by the information about the increase in Porsche Automobil Holding SE’s share of the voting rights in Volkswagen AG, Volkswagen’s ordinary and preferred shares fell sharply in February and continued to do so partly into March. After a phase of recovery, the performance of the two share classes started to diverge: Volkswagen's ordinary share price moved predominantly sideways in April and declined further in May. Renewed volatility followed in June, caused mainly by the comparatively low availability of Volkswagen ordinary shares. This also led to increased interest from financial analysts and institutional investors in Volkswagen preferred shares, whose price rose significantly at the end of the second quarter compared with the beginning of the quarter. The divergent performance of the two types of Volkswagen shares largely continued in the third and fourth quarters of 2009. After exhibiting considerable volatility in July, the price of Volkswagen’s ordinary shares dropped further at the start of August. This drop was initially due to the expiration of options on Volkswagen’s ordinary shares. In addition, there were early expectations that Volkswagen’s ordinary shares would be replaced in the DAX by its preferred shares. Interest in the preferred shares continued to increase and led to a sustained rise in the share price until early October. In response to the announcement made by Qatar Holding LLC that it was selling 25 million preferred shares to institutional investors in the near term, the share price started to move on a weaker trend until the end of November. After a brief period of recovery, the price of preferred shares was relatively stable in December.
The price of ordinary shares continued to decline during the last three months of the year. On December 23, 2009 the shares were removed from the DAX and Volkswagen’s preferred shares took their place in the index. The move had been preceded by Qatar Holding LLC increasing its holding of Volkswagen ordinary shares to 17.0%. As a result, the free float of ordinary shares dropped below the minimum of 10% required to be included in the leading share index.
On January 8, 2009, Volkswagen AG ordinary shares recorded their highest daily closing price in the fiscal year, namely €298.85. At their low on December 21, 2009, the shares were trading at €72.41. On the last trading day of the year, they were quoted at €77.00, representing a 69.2% decline compared with the end of 2008.
Volkswagen AG preferred shares, by contrast, recorded their highest closing price of the reporting period, €81.72, on October 9, 2009. Their lowest price, €30.24, had been reached quite early in the year, on March 9, 2009. At the end of the year, preferred shares were trading at €65.74, or 72.9% higher than the price on December 31, 2008.