Vitesco goes public: DAX member for one day

Curtain up for Vitesco: As a so-called spin-off, the Continental spin-off enters the Frankfurt trading floor – and is even traded on the DAX for one day. But there is not only reason to be happy.

Some IPOs had to be postponed due to the corona crisis. And when they took place, it was rather lonely because of the restrictions in the Frankfurt trading hall. The company Vitesco had to cancel its planned IPO twice – due to lack of demand and due to Corona. Now it worked, and promptly it was a fairly large train station – subject to clear hygiene rules. However, it was not a classic IPO – i.e. a public offer – but a spin-off: a so-called spin-off.

Are spin-offs rightly flawed?

“The spin-offs were certainly seen as a little less good, as a little less interesting, because they were of the general opinion: You can’t sell it, that’s why they have to outsource it now,” explains Jürgen Pieper from Bankhaus Metzler. “But reality has shown that these were often misunderstood companies. I am thinking, for example, of Lanxess from Bayer.” A spin-off alone does not have to promise bad things for the future of the share and the company, said Pieper.

In the spin-off from Vitesco, the spin-off of the DAX corporation Continental, Conti shareholders received one Vitesco share for every five shares. The companies will not receive any money from the spin-off. The new shares can now be offered on the market. And at 9.19 a.m. the time had come: The first price and price for the share was set at 59.80 euros, and the bell rang to celebrate.

Business largely with combustion technology

Some are critical of Vitesco; as a problem child that Continental is separating from. Because Vitesco makes 90 percent of the last eight billion euros in sales with combustion technology. This is under enormous pressure due to the accelerated switch to electromobility. “It is still a problem child in that the results are still not really good,” admits analyst Pieper. “If you compare that with other suppliers and also with the parent company, it becomes clear that Vitesco still has fundamental problems.”

Vitesco boss Andreas Wolf has just warned that he is expecting a significant burden on sales in the 2021 financial year due to the chip crisis. But he does not want to leave the accusation of being the “problem child” or the “leftover ramp” at Continental: “I came to Continental in the powertrain area,” said Wolf. “I had the opportunity to say ‘yes’ or ‘no’ whether I really wanted to do that.” To his surprise, they then saw that there were “really great products” that stood out, but that had to be focused and further developed. “We have now succeeded. We have a completely new strategy that has also been very well received,” the Vitesco boss is convinced.

Battery experts wanted

However, market expert Pieper sees a lot of work and change still to come for the employees. Basically, the company currently has the “wrong” employees, said Pieper. Instead, battery experts are needed. Because: “Experts for electrical engineering are completely different from those for classic mechanical engineering. That means that I have to buy some expensive know-how that is not readily available on the market. These are exactly the people that everyone is looking for at the moment. “

After all, the IPO has finally worked out. Today, as a spin-off from the DAX company Continental, Vitesco is even listed for one day in the leading index, which will grow to 31 members by this evening. This is the norm with spin-offs.