Porsche To Settle VW Trades As Hedge Funds Count Losses

Porsche offered Wednesday to settle hedging transactions of up to 5% of Volkswagen ordinary shares after several prominent hedge funds were short-squeezed by its revelation it owned 74% of the German automaker. (FT)

Greenlight Capital, SAC Capital, Glenview Capital, Marshall Wace, Tiger Asia, Perry Capital and Highside Capital among other funds reportedly rushed to buy stock to cover positions after the disclosure sent Volkswagen shares up 348% Monday and Tuesday.

Prime brokers indicate some of the funds could face billions of dollars in losses.

Sources:

Porsche Offers To Settle VW Hedging Trades (FT)

Porsche Climbs, Volkswagen Drops On VW Stock Supply Increase (Bloomberg)

VW’s 348% Two-Day Gain Is Pain For Hedge Funds (WSJ)