Family members knew something was very wrong when Adolf Merckle, who had directed VEM Vermögensverwaltung GmbH, the family holding company, through tons of successful investments, left the house one day in January 2009 and failed to return. It was not a secret that the current financial calamity had taken a toll on Merckle's investments. He was reputed as a knowledgeable investor in Germany, but had lost hundreds of millions of Euros after being caught on the wrong side of a short squeeze of heroic proportions involving Volkswagen stock.
This was not the only large stake against that firm's stock. As demand for the shares from hedge funds exceed the supply of borrowable shares in the next two days, this short squeeze produced a fivefold increase in the share price of Volkswagen.
Porsche, Volkswagen, and CSX Cars, Trains, and Derivatives Case Study Solution
PUBLICATION DATE: June 03, 2009 PRODUCT #: KEL417-PDF-ENG
This is just an excerpt. This case is about FINANCE & ACCOUNTING
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