Porsche makes more money from options trading than from cars

DAVID HECKER/AFP/Getty Images

Here's an interesting story from Tuesday's Financial Times:

Porsche yesterday revealed it earned three times as much money from trading derivatives as it did from selling cars, prompting accusations it was acting more like a hedge fund.

The German luxury sports car maker said €3.6bn ($5.2bn) of its €5.86bn pre-tax profit in the year to July was from share options.

Stripping out the €521m it made from revaluing its 31 per cent stake in Volkswagen, which it controls, and €702m from its share of VW's profits, it made at most just €1.05bn from its "core" carmaking business.

"It does look like a hedge fund," said Stephen Cheetham, an analyst at Sanford Bernstein.

Another London-based analyst said: "It is a hedge fund investing in just one stock." [...]

All of the options-trading Porsche takes part in relates to its stake in VW, which it has built up from scratch over two years.

Porsche used the options to hedge against the likelihood of VW's shares rising after its interest was made public: they did, from about €40 to almost €180.

Porsche is apparently a little touchy about this: 

This year Porsche said: "We make money from hedging and building cars. The difference is that hedge funds don't make cars the last time I checked."

So there!