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Which Volkswagen stock should I buy?

Volkswagen [VWAGY]  stock has had a strong 2021 so far and is up almost 60% year-to-date, initiated by reports that the German car company could soon steal Tesla’s [TSLA] EV crown.

This article was originally written by MyWallSt. Read more insights from the MyWallSt team here.

Back in July, VW announced that it was planning to be all-electric in Europe by 2033. In addition, the company is planning “massive” changes to its US EV program in response to President Joe Biden’s push for more electric vehicles.

VW is also aiming to match Tesla sales as early as next year and could surpass the EV maker by 2025 by pushing plans to reduce battery costs and open six gigafactories in Europe by 2030.

Lofty plans indeed, and finally, it seems that Tesla has a worthy competitor in an ‘old world’ car company.

VW’s new electric SUV, the ID.4, is now selling across Europe, China and the US. It offers a driving range of 248-342 miles on a single charge. Other VW subsidiaries such as SEAT have also released plans for a series of compact SUVs to the market by 2025, further lifting expectations across the VW group.

So, with all of this heat on VW, retail investors have been flocking to Volkswagen which currently has a steady price of around $32-33 per share.

You’ll notice when you search for VW stock that there are over 20 ticker symbols for the company, which can be confusing. So, we’ve broken it down.

Here are three different ways to buy Volkswagen stock.

Porsche Holding Co

Wall Street Investor Michael Burry, known for inspiring ‘The Big Short’, announced in a now-deleted tweet that he was bullish on VW so he had bought shares in Porsche Holding Co [POAHY], the majority shareholder of VW.

This stock is one way to get in on VW, as well as some of Porsche’s other holdings. However, it hasn’t quite hit the heights of VW’s share prices over the past few weeks, likely due to a lack of retail investors’ knowledge of how the company’s share ownership is set up.

Ordinary shares

Volkswagen ordinary shares [VWAGY] give shareholders voting rights at the company’s AGM. They are the less liquid of the two of VW’s own shares, which as mentioned above, are owned in the majority by long-term investors like Porsche. With so few of these shares available, the share price has surged almost 70% year-to-date.

Preference shares

Historically, VW’s preference shares [VWAPY] are traded with much more volume than their ordinary shares and are therefore more liquid. These don’t offer investors voting rights but they do get priority in the event of any issues within the company such as paying dividends to shareholders.

So, which VW stock should I buy?

If you are bullish on VW, the preference shares could be the best way to go based on the historical volume of purchases and the overall liquidity of the shares. The risk ahead is that the ordinary shares could start to come down in price relative to Porsche and VW preference shares. This could also have a positive, neutral, or negative impact on the other two classes of shares.

 

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