Volkswagen beats Exxon to be most valuable firm

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Oct 28 : nine-month deliveries in Europe declined 4.4% as September sales dropped 8.2%.

Peugeot Citroen, Europe's second-biggest carmaker, and smaller French competitor Renault SA, both had their credit ratings downgraded by Moody's Investors Service because of the risk that car markets won't recover in 2009. Standard & Poor’s said that it may cut the credit rating of Fiat SpA, Italy's largest carmaker, to less than investment grade.

Until Monday, when the stock more than doubled, Volkswagen's biggest gain in almost two decades was a 27% jump on September 18. People familiar with securities lending said at the time that the collapse of Lehman Brothers Holdings Inc caused the increase by triggering recalls of borrowings. The stock fell 23% on October 20, the biggest drop also in almost two decades, as short-sellers predicted the price would decline once Porsche gains control.

There may be little ordinary stock freely trading in Volkswagen because most shares are owned by Porsche, the German state of Lower Saxony and the banks that underwrote Porsche's options, Adam Jonas, a London-based analyst at Morgan Stanley, wrote in a research report on Monday.

Lower Saxony is Volkswagen's second-biggest owner with a 20.1% stake. Index-tracking funds also hold stakes in Volkswagen, now the DAX's most-weighted stock, and must retain the holdings as long as the carmaker remains a member.

Deutsche Boerse AG, the operator of Germany's main stock markets, said that Volkswagen would remain in the DAX unless the carmaker announces the freely traded stock no longer meets requirements. Bloomberg

“We're applying our regulatory framework and as long as Volkswagen's free float is above 5%, the index won’t be changed,” said Torsten Baar, a spokesman for Frankfurt-based Deutsche Boerse. BaFin is analysing trading in Volkswagen stock, though it hasn’t opened a formal inquiry into whether there’s any manipulation and “pure cash-settled options do not require disclosure” under the country’s laws, said Anja Engelland, a spokeswoman for the Bonn-based agency. Results from any analysis are unlikely this week, she added.