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ReprintsVW exec cashes in on short squeeze
November 6, 2008 12:00 CET
FRANKFURT (Reuters) -- Volkswagen's Jochem Heizmann, a management board member and head of group production, became the first company insider to cash in on a massive short squeeze last week which briefly made VW the world's most valuable company. VW in an obligatory disclosure said Heizmann sold 2,000 shares for 537.93 euros each on October 31 for a gain of almost 1.08 million euros ($1.39 million). A company spokesman declined to comment. After closing on October 24 at 210.85 euros per ordinary share, VW stock surged when trading resumed last week, rising to a record high of 1,005 shares. Porsche triggered a stampede to close short positions after it said it had gained direct and indirect control via cash-settled options over virtually all VW shares remaining in free float. Information service Data Explorers said there were twice as many short positions at the time as there were available shares in the market. The squeeze triggered a storm of criticism from investors, prompting some to call for the introduction of disclosure requirements for cash-settled options, and led to a formal investigation from German securities watchdog BaFin that could last for weeks. Under fire for allowing VW share gains to dominate movements in the blue chip DAX index, Frankfurt stock exchange operator Deutsche Boerse changed the rules governing major index constituents. The change will allow for the quick removal of a stock should a similar situation arise again. |
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