CAPITAL RAISING IN THE AUTOMOTIVE SECTOR Analyzing Porsche IPO

Abstract

This thesis seeks to offer a thorough understanding of the automotive industry's current dynamics and future challenges, providing insights into the financial strategies required to navigate this rapidly evolving landscape. The automotive sector is one of the fundamental pillars of the global economy, with a rich and dynamic history that has seen the transition from simple machines to complex and technologically advanced vehicles. This study aims to explore the evolution of the automotive sector, analyzing current and future trends, with a particular focus on the electrification and digitalization of cars, the financial challenges these innovations entail, and the funding strategies necessary to support these changes. In the first chapter, the general automotive sector will be examined, from its origins to the present day. The main trends shaping the future of the industry will be analyzed, with a particular emphasis on electrification and digitalization. This chapter will also address future costs, and the funds needed to face these changes, concluding with a forecast of the sector's future cash flows. The second chapter will focus on ways to recover the necessary funds to support innovation in the automotive sector. Corporate finance principles will be specifically analyzed, starting with the foundation of corporate finance, delving into the optimal financial mix for a company and delving related topics such as the risk factor, cost associated to it and return on investments. Then we will focus on extraordinary fundraising methods such as mergers and acquisitions (M&A), Special Purpose Acquisition Companies (SPACs), and other specially created instruments will be analyzed such as the Initial Coin Offering (ICO). Particular attention will be given to the Initial Public Offering (IPO) as a financing method. In the third chapter, the role of financial intermediaries in fundraising activities will be examined, with a specific focus on IPOs. The chapter will discuss who these intermediaries are, their crucial role in facilitating financial transactions, how they support companies in the process of going public and what are specific issues that can arise during their works. The final chapter will be dedicated to an in-depth case study on Porsche. An analysis of the company's history and development will be presented, examining how Porsche has become one of the most prestigious and influential brands in the automotive sector. The motivations that led Porsche to go public in 2022 will be analyzed, evaluating the company's financial and economic data before and after the IPO to determine whether the results of the listing have been positive or negative. This thesis will provide a comprehensive view of the current dynamics and future challenges of the automotive sector, offering an in-depth understanding of the financial strategies necessary to navigate this rapidly evolving landscape.