So it seems like cheating on emission tests is now a thing. With Volkswagen having already seen the consequences of such a scandal in the past before, it doesn’t seem like they learnt their lesson. Even though Volkswagen knew what the negative outcome of this would be on their business, they went ahead with it, in the hopes of not getting caught.
Share prices for VW fell more than 35% and this had a very damaging effect on their accounts. With almost a $18 billion fine, Volkswagen has tried to minimize the damage to it’s balance sheet by apportioning $7.3 billion to pay off fines and litigious customers. A lot of their main investors had suffered along with the business.
Although, when you look at the flip side of this, aside from how willing VW was to take the risk, look at how much time they had ahead of them for investing. It may have been a profitable strategy if they had managed to have perfect timing with it. Because at the end of it all, a stock that does look cheap without knowing how it got there, could possibly be a bargain.
“Why Volkswagen’s Share Price Has Fallen so Far.” The Economist. The Economist Newspaper, 21 Sept. 2015. Web. 04 Oct. 2015.
“Crisis Stocks – Should You Catch a Crashing Car?” CNBC. N.p., 29 Sept. 2015. Web. 04 Oct. 2015.
“Have You Learned the Lesson from VW’s 35pc Share Price Fall?” The Telegraph. Telegraph Media Group, n.d. Web. 04 Oct. 2015.
Pope, Carl. “The Volkswagen Scandal: We Have Been Here Before.” The Huffington Post. TheHuffingtonPost.com, n.d. Web. 04 Oct. 2015.
“CREDIT SUISSE: The Emission Scandal Could Cost Volkswagen €78 Billion and Shares Need to Fall Another 20%.” Business Insider. N.p., n.d. Web. 04 Oct. 2015.
