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Strategies & Market Trends : The coming US dollar crisis
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To: ggersh who wrote (24709)11/24/2009 7:03:30 PM
From: RockyBalboa  Read Replies (1) of 71417
 
VW had no problem

VW was the derivative problem. Porsche messed it up by heavily borrowing and buying options on VW stakes so that they had over 50% in total, more or less. But they didn´t have the money to pay for the acquisition. There is no mention about the options which have been deeply in the money, some by several 100 Euros per share. I believe the options have been "surrendered" and the porsche company gained nothing from it.

Perhaps one day we can read in a book how all came and who stood to make a profit in the end. Till then,...

I have no doubt that VW are well run and have some value so the stock could see a boost. But this could take a while and a decent bottom must be built before. Those types who shorted the stock for a year and bought preferreds against it made a lot of money and perhaps reversing the deal could drive the price differential higher again.
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