VW passes Exxon as world's most valuable company

Volkswagen AG became the world's biggest company by market value after Porsche SE announced plans to raise its stake in the German carmaker to 75 percent, triggering demand from short-sellers.

Volkswagen rose as much as 485.01 euros, or 93 percent, to 1,005.01 euros and was up 89 percent as of 9:55 am in Frankfurt trading. Porsche said it will increase its holding from 42.6 percent, prompting some short-sellers to buy from a shrinking pool of stock to end their bets. Volkswagen has risen more than sixfold this year, valuing it at 294 billion euros, more than Exxon Mobil Corp's $343 billion market value at yesterday's close, according to data compiled by Bloomberg.

Porsche, the maker of the 911 sports car, has accumulated Volkswagen shares since 2005 to protect ties to its biggest supplier. Wolfsburg-based Volkswagen's gain came as 28 of the 29 other stocks in Germany's benchmark DAX Index fell on investor concern that a slowdown in the global economy is accelerating. "One of the biggest risks with the herd mentality approach to shorting is that a lot of money can be made on the outset," said Ed Oliver, a senior business consultant at Spitalfields Advisors, a London-based firm specializing in securities lending.