I stumbled upon the fact that VW (DE0007664005) owns 99.55% of all shares of Audi (DE0006757008), i.e. only 0.45% of Audi are traded now. Why should someone buy shares of Audi?
You buy stock to:
- Get dividends
- Increase the value of the stock (hoping to sell it for more than you bought it)
- Getting involved in decisions
- Because you support the idea/uniqueness of the company
Get dividends: Audi's dividends are WAY lower than those of VW. In addition, Audi will spend many of his assets for “license” and other reasons to send directly to VW.
Increase the value of the stock: If Audi is doing good business most of its profit will go to VW – making only a small difference on the stock. If Audi is doing bad business VW maybe begins to sell some of its Audi stock – a nightmare, imagine all of a sudden the 99.55% of shares on the market will destroy the price of Audi's share. Also VW has more brands, i.e. is more diversified
Getting involved in decisions: Sure, you can vote, but in best case, you own 0.45% while one other shareholder has 99.55%
Unique company: A company who makes cars and is owned by a company who holds car makers is not that unique
Am I missing something? Why should someone even consider buying Audi shares instead of VW?
The same for Novo Nordisk and Novo A/S but not as extreme like here