Stock Market Analysis

Which Volkswagen Stock Should I Buy?

With the old world automaker growing in popularity every day, we want to set the record straight on which ticker is the one for you.

Volkswagen stock has seen a recent surge, initiated by reports that the German car company could soon steal Tesla’s crown. VW unveiled their roadmap last week which could see them match Tesla sales as early as next year, and could surpass the EV maker by 2025, pushed on by plans to reduce battery costs and open six gigafactories in Europe by 2030.

Lofty plans indeed, and finally, it seems that Tesla has a worthy competitor. And a very interesting one at that, matching an ‘old world’ car company in a fight against an EV giant, led by the Technoking himself, Mr. Elon Musk. While some analysts claim that VW has been underrated and undervalued in their EV fight, Tesla bulls like ARK’s Cathie Wood remain unimpressed and are still gung-ho and full steam ahead on Tesla to remain top of the EV pile.

More VW news this week sees their new Electric SUV, the ID.4 now selling across Europe, China, and the U.S., with VW targeting the mass market in China, where costs are the equivalent of $30,800 after subsidies — less than Tesla’s Model Y. It offers a driving range of 248-342 miles on a single charge. Other VW subsidiaries such as SEAT have also released plans for a series of compact SUVs to the market by 2025, further lifting expectations across the VW group.

So, with all of this heat on VW, retail investors have been flocking to the markets to get a piece of the company as prices have steadily risen from early January, with over the counter shares of Volkswagen (OTCMKTS: VWAGY) at a steady price of around $20 per share, to a high last week over $42 per share.

You’ll notice, however, on a search for VW stock that there are over 20 ticker symbols for the company, which is something that has been confusing investors looking to jump in. Share prices abruptly fell late last week with regulator interest in the price rise and subsequent frenzy.

Breaking it down, there are 3 ways to buy into VW:

Porsche Holding Co (PAH3 in Germany or POAHY in the U.S.)

Wall Street Investor Michael Burry, who’s known for also inspiring Michael Lewis’ bestseller-turned-film, ‘The Big Short’, announced in a now-deleted tweet that he was bullish on VW to the point that he had bought shares in the Porsche Holding Co, who are the majority shareholder of VW. The ticker symbol of PAH3 in Germany or POAHY in the U.S. is one way to get in on VW, as well as some of Porsche’s other holdings. However, this stock hasn’t quite hit the heights of VW’s preferred share prices over the last number of weeks, likely related to the lack of retail investor’s knowledge of how the company’s share ownership is set up.

Ordinary Shares (VOW in Germany or VWAGY in the U.S.)

The less liquid of the two of VW’s own shares are their ordinary shares, which as we have outlined above, are owned in the majority by very long-term investors such as Porsche. These shares give shareholders voting rights at the company’s AGM. With so few of these shares available, the price has surged and diverged disproportionately from their preference shares.

Preference Shares (VOW3 in Germany or VWAPY in the U.S.)

Historically, VW’s preference shares are traded with much more volume than their ordinary shares and are the more liquid of their shares for the above reasons. These don’t have voting rights but they do get priority in the event of any issues within the company such as paying dividends to shareholders.

So, which VW stock should I buy?

If you are bullish on VW and looking to buy, the Preference Shares could be the best way to go based on the historical volume of purchases, the overall liquidity of the shares, and the fact that they have diverged less than their Ordinary shares over the last number of weeks. The risk in the weeks ahead is that the Ordinary shares could start to normalize and come down in price relative to Porsche and VW Preference Shares. This could also have an impact, positive, neutral, or negative, on the Porsche and VW pref share price — this remains to be seen. 

But VW preference shares appear to be the best bet if you’re looking to bet on VW.

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MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here

Rob Cumiskey
Rob Cumiskey
Rob's favourite stock is Virgin Galactic, chosen for its visionary founder in Sir Richard Branson and its lofty goal to make space tourism accessible to the masses in the not too distant future. The road ahead for them won't be without its challenges, but Rob believes it to be a very exciting long-term investment opportunity!
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