Research Notes: Volkswagen Looks Like Free Money

The world's largest automaker is trading at a negative enterprise value. Why?

Highlights:

• Adjusted for its leasing business, cash and securities, and the value of its stake in Porsche, Volkswagen is trading at a negative enterprise value.

• Obvious drivers of that valuation (weak performance or poor treatment of shareholders) don’t seem to apply.

• There are a variety of concerns, but none justify the current prices in Volkswagen or Porsche.

• Standard ‘sum of the parts’ risks apply, but it’s hard not to be intrigued here.