At a market cap near €36 billion, Volkswagen's stakes in Porsche, Lamborghini, Traton and Rivian—plus €32–34 billion in cash—arguably add up to more than €83 billion before a single core brand is valued. That is the mispricing.
The following analysis was submitted by a loyal Stock Psycho follower with 38 years of experience in Wall Street bond and fixed-income sales. It reflects their personal opinion and investment thesis—not financial advice.
Recently, the headlines surrounding VW have been doom and gloom—and then some. Most of it is generated by the British press, which coincidentally domiciles several hedge funds that hold large shorts in VW: Qube Research, Jericho Capital and Marshall Wace, to name a few. Those three entities account for roughly 3.5–4 million shares shorted, and there are other shorts out there as well. Marshall Wace is rumored to hold shorts across the German auto industry totaling €750 million.
But that's not the main theme I'm approaching here. VW currently represents one of the most absurd mispricings I have ever witnessed. Let me explain.
The Asset-Value Disconnect
According to the stock market, VW is currently worth about €36 billion (all figures in euros). Yet they hold bonafide assets that dwarf that number. Consider the following stakes:
- €30 billion in Porsche
- €15 billion in Traton
- At least €20 billion in Lamborghini
- €4 billion in Rivian stock
- Roughly €14.5 billion in combined cash and a retained 49% stake, following the reported sale of a 51% stake in Everllence to Bain Capital
They also hold interests in numerous other entities—more than 1,000, according to CEO Oliver Blume. That gets you to €83.5 billion minimum—free and clear of the Core Brands group.
Oh, and did I fail to mention that they hold €32–34 billion in cash on their balance sheet, and that most of their debt is in the form of car leases and loans? The stock is trading at an astounding 10–20% of book value.
The "Catastrophic" Financials
As for the recent financials that have been described as "catastrophic" and "collapsing," they generated €3.2 billion in free cash flow in the first half of 2026, and €6.4 billion in 2025. They are actually making money in China—albeit only €300–500 million.
Layoffs, Wages, and German Efficiency
Layoffs are NOT a negative here; they will enhance the bottom line going forward. A couple of other things worth noting: VW has been profitable year after year despite paying its workers better than almost anyone else in the global auto industry—which speaks to a German efficiency that creates margins where others would fail.
Strong unions have hampered the German auto industry forever. But for the first time in decades, the German government has recognized a need to intervene to support the overall German car industry—and the economy by default.
I hope I've proven a point here. Who wouldn't want to see a few British hedge funds get smoked?
Disclosure: This is personal opinion and independent analysis. Figures should be confirmed against Volkswagen's latest financial statements, regulatory disclosures and reported short-position data before making an investment decision.