Friday, January 9, 2009

A link to the story behind VW, Porsche, Merckle, and the Short Selling Squeeze.

I came across Ivan Krstic's blog post, "How Porsche hacked the financial system and made a killing". Krstic provides a the story behind the story about "squeezy money" and the sad fate of Adolfe Merckle.

Here is an excerpt:

"On paper, Porsche made between €30-40 billion in the affair. Once all is said and done, the actual profit is closer to some €6-12 billion. To put those numbers in perspective, Porsche’s revenue for the whole year of 2006 was a bit over €7 billion."

"Porsche’s move took three years of careful maneuvering. It was darkly brilliant, a wealth transfer ingeniously conceived like few we’ve ever seen. Betting the right way, Porsche roiled the financial markets and took the hedge funds for a fortune...Betting the wrong way, Adolf Merckle took his life."

Note: I have not checked Krstic's facts.

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