Volkswagen shares are getting hammered again on Wednesday, the third day running. They’re down by more than 7% at the market open after losing more than a third of their value in two days.
Investors are shunning VW shares because of uncertainty.
Here’s what Tim Rokossa and the analysts at Deutsche Bank have to say about it:
After VW lost c. €30bn of its market value in 2 days, it might strike as a buying opportunity. However, we stress that the full magnitude of the emission scandal is likely to remain uncertain for much longer. So far we conclude that 1) the legal fines will be painful, impossible to quantify and potentially remain a topic for years.
Tuesday was full of drama.
CEO Michael Winterkorn was forced to make a statement saying he was staying at the company after German press reports affirmed he would be replaced by the end of the week.
VW said that up to 11 million cars worldwide were affected by the scandal, far more than the half a million the company said were affected on Friday.
It issued a profit warning setting aside €6.5 billion (£4.70 billion, $US7.27 billion) to “cover the necessary service measures and other efforts to win back the trust of our customers.” It adds: “discrepancies relate to vehicles with Type EA 189 engines, involving some 11 million vehicles worldwide.”
Just to recap what the emissions scandal is about: US regulators found that software the carmaker designed for diesel cars gave false emissions data. VW faces fines of up to $US18 billion (£11.6 billion), the Environmental Protection Agency said on Friday.