“dieselgate” Scandal of VW Sums up to whopping $30 bn

VolkswagenIt has been close to 3 years that Volkswagen AG (OTC: VLKAF) the German automobile manufacturing company was caught fooling pollution tests by using a unique software program. Since then, Volkswagen has kept aside $26.7 billion for buying or fixing 500,000 automobiles including Audi3, Golf and Jetta models.

Recently, the company was found stating that overall process is quite complicated and the money that has been kept aside is not sufficient enough to fix this mess. The car manufacturing company has announced that it is taking another $3 billion ($2.5 bn) in the present quarter related to emission issue. The stocks of the company which is trading at $169.82 in OTC exchange to turn bearish in the coming time.

If we include the charge of $3 billion taken by the company last week, the total amount that has been set aside for resolving this mess has gone up to $25 billion. Volkswagen admitted in September 2015 that it used special software to cheat US diesel emission tests. The software was fitted with 600,000 automobiles.

This is the biggest tragedy in the 80 years old business history of Volkswagen. This scandal or cheating is called “Dieselgate” and was exposed in 2014 after a discrepancy in emission was found in a research done by West Virginia University. In 2015, one of the employees of the company has defied the orders of his supervisor and become the whistleblower. A thorough investigation has revealed that the automobiles emitted more than 40 times than the legally allowed levels of Nitrogen Oxide.

Wochit Business

Volkswagen has agreed to settle this issue with US authorities and has spent a whopping sum of $15.3 billion to fix or buy the polluting diesel vehicles. Almost 15 months have passed, and the issue is still pending. The additional provisions would be reflected in the 3rd quarter results of the company. It has also raised doubts as Matthias Mueller who is the CEO of the car manufacturing company is in complete control of the situation.

A German engineer by the name Wolfgang Hatz who ran the motor development of Volkswagen between 2007 and 2011 was incarcerated by the concerned authorities. In May 2016, he was suspended once the scandal was made public.

In a completely unrelated incident, Scania truck unit of the company has levied a fine of $1 billion for overcharging the customers. The company is not able to divest in the Ducati motorbike brand due to massive resistance from the workers union. As a result of which, the stocks of Volkswagen is speculated to remain bullish for the time being.

If we look at the historical price chart, it is showing a technical resistance level at 170. In addition to this, the MACD indicator is below the zero mark. We expect the share price to decrease in the coming time.

Volkswagen Stock Price Oct 3rd 2017

Volkswagen Stock Price Oct 3rd, 2017

To earn money from the stock downtrend of Volkswagen, traders are recommended to purchase a put option from a genuine binary options broker. Traders should BUY a PUT option when the stock is trading around $170 in the equity market. Also, the traders should set the expiry period around 11th October.

Rich Archer

Rich Archer

Hi, my name is Rich Archer. I am living in London. Welcome to Binary Manual. Reach to Binary Options broker reviews and market news here.

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