Tuesday, October 28, 2008

Easyjet broke advertising rules by exaggerating the cost of its fares compared with British Airways, a watchdog has ruled.


FRANKFURT, Germany (AP) -- Shares of Volkswagen jumped as much as 93 percent on Tuesday after gaining over 150 percent the previous day, supported by Porsche's announcement it plans to buy three-quarters of the automaker's stock.Volkswagen shares spiked as high as €1,005 ($1,256) in Frankfurt trading, nearly double Monday's closing figure of €520 ($650.93). They later settled back to €621.34 ($777.79) -- a more modest gain of 19.5 percent.
Porsche was already Volkswagen's biggest shareholder and said Sunday it had lifted its stake to 42.6 percent and had secured options to buy more of the company.
Stuttgart-based Porsche said "the goal remains, as long as the financial conditions are right" to increase its holding to 75 percent next year. As part of that goal, Porsche said it was sticking to plans to lift its VW stake above the 50 percent mark this year.
The German state of Lower Saxony, where Volkswagen's Wolfsburg headquarters is located, holds just over 20 percent of the company's shares.
Analysts said that because Porsche has acquired a big part of Volkswagen's shares, the amount of freely floating shares is low, at only 6 or 7 percent, making it possible to get a high stock price gain with little money.
"Yesterday, VW has almost doubled its market capitalization," said Oliver Roth, the director of equities trading at Close Brothers Seydler AG on Frankfurt exchange floor. "That's crazy; they should stop trading that share."
Torsten Baar, a spokesman for Frankfurt exchange operator Deutsche Boerse, said the Volkswagen stock would remain in trade as long as it still has a free float of 5 percent.
"We don't know exactly where it is at the moment," Baar said. "They're close, yesterday they were around 2 percent away from there."
Porsche shares fell on Monday, but reversed course on Tuesday. They were up 7.65 percent at €45.05 ($58.86).

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