Interesting...
http://www.theaustralian.news.com.au...rom=public_rss

Shares of Volkswagen rose sharply overnight to touch 1005 euros, making the carmaker the world's largest company by market value.
It was bigger than US oil giant Exxon at the time.

The stock reversed afterwards, only to regain ground again later to close 82 per cent higher in Frankfurt at €945.00 ($1873), up €425.00 ($842) on the day.

Frankfurt's benchmark DAX closed up 11 per cent - mostly on the back of VW's rise - outperforming other major indices in Europe by a wide margin.

Volkswagen's shares have been on a roller-coaster ride since Porsche Automobil Holding began building a major stake in its much-bigger German peer in recent months. In the past year, the shares have traded in a range from €144.30 to €950.

Short sellers, betting in recent weeks that Volkswagen shares would fall, have rushed to cover their bets by buying shares from a diminishing free float and bidding up the price in the process.

According to London-based Data Explorers, 12.8 per cent of VW shares were outstanding on loan as of October 24, mostly for short sales.

Uncertainty in the market over who was caught wrong-footed on the short-seller side sent shares of several financial firms lower, including Goldman Sachs and Societe Generale.

Goldman Sachs said the firm did not comment on its stock activity as a matter of policy and Societe Generale said it had "nothing specific to communicate" regarding its equity derivatives activities.

The market capitalisation of Europe's largest automaker by sales at its peak had reached about €295 billion, or $US369 billion ($584 billion), more than Exxon's market value of $US343 billion at Monday's closing price and more than half of the overall market capitalisation of all other German DAX blue-chip companies combined.

This week's gains in VW stock were fuelled by Porsche's announcement on Sunday that it controls a much larger stake in VW than investors believed and aims to take full control through a 75 per cent stakeholding.

Porsche said that it holds 42.6 per cent of the ordinary shares and has cash-settled options for an additional 31.5 per cent. The German state of Lower Saxony holds a stake of 20.1 per cent.

"Combined with our estimate of 5 per cent ... being held by index trackers, this implies that the free float is negligible," UBS analyst Daniel Stillit said.

The finance minister of Lower Saxony, Hartmut Moellring, said the German state has no plans to sell VW shares.

"This is a very attractive price ... (but) we're not speculating or gambling," Mr Moellring said in a telephone interview, adding that Lower Saxony views its stake as a strategic investment.

A spokesman for German stock market operator Deutsche Boerse said the company has no plans to suspend Volkswagen shares from trading because the free float hasn't fallen below 5 per cent.

A spokesman for Porsche rejected allegations of share price manipulation. He said this would be a confusion of cause and effect, adding that investors betting on Volkswagen's share price were responsible for the stock's extreme volatility.

Porsche said it fears that volatile trading of VW shares could distort Porsche's balance sheet. "We have no interest in putting VW on our books at such an economically senseless price," a spokesman said, adding that "a fair value for VW certainly lies below the current share price".