Of course, by October 2008 the world was in the grip of the global financial crisis, and short-selling was rampant. But on 26 October 2008, Porsche revealed that it had gained control of 74% of Volkswagen’s voting shares by buying up almost all of the company’s circulating stock. Porsche and Volkswagen had a long history of working together, and Porsche had consistently maintained a minority stake in Volkswagen. But the campaign fizzled out and Saunders was forced to turn over his stock and file for bankruptcy. He made an early attempt at crowdfunding by taking out ads in local papers saying that the failure of Piggly Wiggly would shame the whole South. Saunders ended up with complete control of Piggly Wiggly stocks, millions of dollars of debt and no ability to sell his shares on the public market. The suspension gave the short sellers time to buy up most of the company’s 1128 outstanding shares and cover their positions. The following day, the NYSE suspended trading in the stock, before permanently stopping all trading in Piggly Wiggly on 26 March. Using his own money and $10 million from a group of bankers, he bought up all available Piggly Wiggly stock, pushing the price of the stock up by approximately 50%.īy March 1923, Saunders owned all but 1128 shares of the company’s outstanding shares, and he called on the short sellers to pay up. "Hardly a single other German corporate dynasty acts in such unpredictable and relentless way as the Merckle clan from Blaubeuren."įorbes recently ranked Merckle as the fifth-richest person in Germany, with a fortune worth an estimated $9.2 billion.Īccording to Forbes, Merckle's fortune was inherited from his Bohemian grandfather, but he has nurtured a chemical wholesale company, Phoenix Pharmahandel, into the largest pharmaceuticals wholesaler in Germany, with annual sales of €21.6 billion.After market traders started to short Piggly Wiggly stock, Saunders vowed to hit back. "Adolf Merckle collects companies like others collect watches," wrote Manager Magazin, in one of the few extensive portraits of the German billionaire. He has assembled a business conglomerate with about 100,000 employees and €30 billion in annual sales. Ratiopharm and HeidelbergCement are just two companies in Merckle's vast portfolio, which also includes a maker of grooming vehicles for ski slopes, a sugar refinery and one of Germany's oldest foundries. The losses have fueled speculation that the industrialist could sell the generic drug company Ratiopharm or part of his stake in HeidelbergCement, both of which are based in Baden-Württemberg. But Merckle has become the most well-known casualty of the massive short-squeeze that briefly made VW the world's most valuable company late in October, when its share price rocketed to just over €1,000, or $1,260, from €210 in two trading sessions. Little is publicly known about the 74-year old industrialist who lives in the southwest German state of Baden-Württemberg and is said to enjoy skiing and mountain-climbing. "He had a reputation for being very, very prudent, very cautious - a typical entrepreneur who always remained down to earth," said one analyst, who asked to remain anonymous because he was expressing a personal view rather than his bank's opinion. Merckle, the 94th-richest person in 2008, according to Forbes magazine, incurred massive losses from wrong-way bets on Volkswagen shares, putting him under pressure to sell some assets or seek bridge loans. FRANKFURT - The German billionaire Adolf Merckle may be media-shy, but he is not afraid to place big bets and make the headlines on the back of them.
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