Rare Volkswagen shares commanded giddying prices Monday on the Frankfurt Stock Exchange after Porsche announced it was within sight of 75-per-cent control of Europe's biggest carmaker.
The stock spiked 200 per cent before settling to 520 euros at the close of electronic trading, up 146 per cent from Friday.
Analysts said it was not luxury car-maker Porsche that was paying the high price, but short sellers who had expected the stock to fall in value and suddenly needed to settle contracts.
Porsche revealed Sunday it had advanced its stake from 35 to 42.6 per cent of Volkswagen Group. Additionally, it had obtained options for an additional 31.5 per cent of Volkswagen.
The exchange's 30-share DAX index closed slightly higher. If the other 29 DAX shares had been counted by themselves, the index would have fallen 9 per cent.
Porsche's extraordinary advance to full control surprised markets and left Volkswagen's shares hard to obtain.
"This is a massive short squeeze," said one broker.
Another broker, for DZ Bank, said his bank had put a "buy" recommendation on the stock for those willing to speculate, since the sky was the limit as the squeeze tightened, with hardly any uncommitted shares left.
DZ Bank set a target of 911 euros for the stock, which has been as low as 143.90 euros in the past 12 months.
Porsche says the options contracts ensure it will own 74.1 per cent of Volkswagen by next year. A stake of just over 20 per cent held by the German state of Lower Saxony is not for sale, leaving just over 5 per cent uncommitted.
The European Union is expected this week to announce fresh action to force Germany to repeal legal provisions that give Lower Saxony veto rights at Volkswagen meetings.
Such a move would seal the Porsche takeover as final.
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