Volkswagen AG (ADR) (OTCMKTS:VLKAY) lost almost all the gains made in the previous session as it finished the last trading session with a loss of 1.56%. The volume of the day at 872,000 was much lower than the recently increased daily average of 1.3 million, reflecting the corrective nature of the price action at this point. The stock formed a huge Rounded Top in the early part of the year, one of the most bearish top patterns. The breakdown is clearly visible on the chart attached and any kind of corrective bounce can expect stiff rejection from the gap resistance.
Volkswagen AG (ADR)(OTCMKTS:VLKAY)’s diesel emissions scandal has halted the 600 million euro sale of Turkish parts supplier firm Teklas Kaucuk. Two foreign bidders a consortium of investment companies Turkey’s Esas Holding and Oaktree Capital Group and a Cooper-Standard Automotive have pulled out to evaluate the impact of the emission scandal on Teklas Kaucuk’s sales.
Teklas is a great company with yearly EBITDA of 75 million euros. The sale value was projected at more than 600 million euros, but following the scandal the bidders now seek a lower deal price. Investors have opted for a wait and watch mode. The proceedings have stalled for now as the two bidders want to assess Volkswagen problems in the pricing.
Raul Danon, a Board member of Teklas, confirmed that bids from respective bidders have fallen through, but added Teklas and its financial advisors had rejected them. He said that Teklas has been constantly fetching attention from foreign financiers. Recently two investors made bids to acquire the company.
Volkswagen admitted on September 18, 2015 that it deployed illegal software to influence emissions tests on its diesel cars in the United States. Nearly, 30% of Teklas’ yearly sales of 255 million euro are to Volkswagen. The privately-owned firm produces components for many other automobile firms including BMW and Toyota.
Volkswagen faces massive fines, repair expenses and legal cases and is reducing yearly investment to the tune of €1 billion at the core Volkswagen brand. Matthias Müller, the new CEO, intends to recall as many as eleven million cars affected worldwide by next year. The emissions scandal has scythed company’s market cap and prompted a management change at the top.
Toyota Motor regained its position as the world’s biggest car firm by sales, replacing Volkswagen as the company deals with the fallout from its recent emissions scandal.