... here is an in-depth recounting of that story:
Porsche: The Hedge Fund that Also Made Cars...I think the chances of a similar scenario playing out with TSLA are near-zero,
Great link! Some key excerpts in support of your conclusion:
"... because of something called the 'Volkswagen Rule.' The essence of this rule was that the local German government of Lower Saxony owned 20% of Volkswagen and could prevent anyone from acquiring company without their permission..." No analogue with TSLA
"...On October 27 2008, Porsche dropped a bomb on the financial community: it had again raised its stake in Volkswagen -- now to
42.6%. Moreover, it had secretly purchased “cash-settled” options to purchase
another 31.5% of outstanding Volkswagen shares. Combined, Porsche had now corned
74.1% of all Volkswagen shares!..." Note cash settled.
"...For the short sellers, this was a disaster. Not only was Porsche continuing to buy up Volkswagen, which drove up its price, but since Porsche and the Lower Saxony government controlled 94.1% of the Volkswagen shares together, there were practically zero available shares on the market for the short sellers to cover their position..."
"...his maneuver of secretly buying shares would have been (and still would be) illegal in the United States. In Germany though, where Porsche is based, it was likely legal. Normally, it would have had to disclose its growing position, but it used “
cash settled” options, which technically wasn’t considered “buying shares” in the company..."
Aftermath:
"...And
precisely when Porsche needed banks the most, banks stopped lending money. The words spoken by the company’s CFO years before --
“banks are there for you when you don’t need them, and when you do need them, they’re no where to be seen” -- now seemed prophetic..."
"...The dramatic decline in VW stock price beginning about October 20, 2008 would have threatened to bankrupt Porsche had Porsche not already set its trap by luring in short sellers. That day, VW stock closed at €277, more than 22% below its closing price the previous Friday. By October 24, 2008, VW was trading at €211,
more than 40% below the closing price of €358 on October 17, 2008. {SP plummeted 40% in five trading days
}
...After VW's stock wild ride, Porsche agreed on October 29, 2008 (albeit under substantial pressure) to settle 5% of its position (releasing the squeeze at a substantial profit) and the German stock market (DAX) reduced VW's weighting in its index so that enough shorts were able to cover. This caused VW's stock price to return to more rational levels (plunging back to about €200 per share). But this was not before investors with significant short positions, like Plaintiffs, lost an estimated €30 billion in less than a week, and Porsche received a windfall of over €6 billion. Today [article dated 10/17/13],
VW is trading at round €76.
"...German market regulators (BaFin) are investigating allegations of wrongdoing at Porsche, and Defendants Wiedeking and Haerter (both unceremoniously deposed from their positions as CEO and CFO at Porsche in July 2009) have had their homes and offices raided by Frankfurt and Stuttgart criminal authorities pursuant to a widening insider trading investigation..."
Financial Fraud and Securities Law : Porsche's Big "Squeeze" - the "Mother" of all Shorts - and Porsche's consequential derivative litigation
Adolf Merckle, one of the richest men in Germany, committed suicide within months of losing hundreds of millions of dollars.
"...Wendelin Wiedeking and Holger Härter acquitted of market manipulation [3/18/16] Wendelin Wiedeking and Holger Härter acquitted of market manipulation
Civil litigation on going.
