Volkswagen pays and Adyen spikes | Calamatta Cuschieri

Market roundup, Volkswagen to pay a €1 billion fine and PayPal’s contender surges on IPO

Volkswagen announced it will pay a €1 billion fine over the diesel emissions scandal from 2015
Volkswagen announced it will pay a €1 billion fine over the diesel emissions scandal from 2015

Volkswagen announced it will pay a €1 billion fine over the diesel emissions scandal from 2015

Market roundup

Markets in Europe closed flat to higher on Wednesday as investors awaited the United States Federal Reserve's monetary policy decision announcement later on after the close of the European session. In fact later on, the Federal Reserve raised the key interest rates by 0.25 points for the second time this year. Meanwhile, traders digested industrial production and employment data from the Eurozone.

The DAX rose 0.38%. Lufthansa led the gains as the airline's shares jumped 3.25%. The FTSE 100 and the CAC 40 closed flat.

Volkswagen Diesel Gate

German automaker Volkswagen AG announced it will pay a €1 billion fine over the diesel emissions scandal from 2015, in which it was accused of market manipulation through fraudulent diesel emissions software built into its vehicles. Last year, the company paid a $2.8 billion fine in North America after accepting the responsibility for the misconduct, with more than $25 billion in total damages.

Prosecutors in the city of Braunschweig have determined that the car manufacturer did not conduct proper oversight of its engine development department, and sold more than 10 million cars worldwide between 2007 until 2015, with improper emissions-controlling software built in.

Volkswagen admitted its responsibility for the diesel emissions scandal in a statement, and said it will not appeal against the decision.

PayPal’s contender surges on IPO

The stock market debut of Adyen NV took the payment service provider's valuation to as much as €13.4 billion. Shares of the company based in Amsterdam jumped 89.15% in early trade, to €453.95. The pricing, set at €240 apiece for the launch at Euronext, was at the top of the guidance range. The €849 million of proceeds from the initial public offering all went to existing owners, including General Atlantic Llc and Index Ventures, and the company didn't raise any capital.

The technology firm, founded in 2006, has operated with a profit since 2011. For last year it reported $122 billion in processed payments, a rise of 61%, with fees at 0.2%. Net revenue grew 38% to €218 million. It has 700 workers and 15 offices around the globe.

The IPO was organized for a share of 12%, while the bottom in the target pricing range was €220. The full overallotment option, covering 11.5% of the package, would bring €947 million at the determined price, taking the float to 13.4%. At one point shares were 86.56% higher, selling for €447.75.

Disclaimer:

This article was issued by Rodrick Duca, Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.

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