Porsche's CEO has aims to reintegrate the company back into the German stock index DAX.

Porsche CEO, Blume, Steered Towards Re-entry into DAX - Porsche's CEO Blume seeks return to Germany's DAX index.

Porsche Demoted from Dax Index, Aims for Rapid Return

In a significant move, Deutsche Boerse has decided to demote Porsche from the Dax index, effective from September 22. The sports car manufacturer, based in Stuttgart, Germany, remains one of the most valuable German companies, still counting among the large listed companies in the country.

The decision comes as Porsche's share price has fallen from around 120 euros following its initial public offering (IPO) in late September 2022, to around 45 euros currently. The company is now listed in the MDAX index.

The demotion is due to technical factors, according to Oliver Blume, CEO of Porsche. Despite this, Blume is confident that investors will continue to recognize the value of Porsche's stock. He aims to quickly return the sports car maker to the Dax index following its demotion.

Porsche is measured against companies with a lower market value but a significantly higher float in the Dax. The Deutsche Boerse considers only the freely tradable float when composing the Dax, and this is relatively low at around 12% for Porsche AG.

The announcement of Porsche's demotion from the Dax index was made by the Deutsche Boerse on Wednesday evening. This demotion is symbolic of the crisis in the German automotive industry, with share prices of German automotive companies under pressure due to declining profits.

Porsche expects to see higher share prices in the future due to its recent restructuring programs. However, the company is currently in transition, facing significant challenges such as a sharp profit decline, pressures from US tariffs, shrinking sales in China, criticism of Blume's dual role as CEO of both Volkswagen and Porsche, and ongoing industry difficulties impacting stock value and company performance.

Despite these challenges, Blume has noted a clear goal to achieve Porsche's return to the DAX index. However, this plan may be more difficult than Blume envisions, as the company works to navigate these complex issues.

Porsche AG went public in late September 2022, marking one of the largest IPOs in German economic history. The total market capitalization and the brand's clout are significant factors in Porsche's status as a large listed company in Germany.

Oliver Blume is determined to lead Porsche through this transition, with the aim of returning to the Dax index as soon as possible with its new direction.