Short sellers desperate to close their positions paid as much as €1005 ($1989) a share during the session following Sunday's news that there was less than 6 per cent of VW voting stock still floating in the market.
At that price Volkswagen's voting stock was worth €296 billion, or more than the $US343 billion ($531 billion) market capitalisation of Exxon Mobil.
VW shares later closed trading on Tuesday up 82 per cent at €945.
The share price has rocketed since Porsche revealed in a surprise announcement that it had effectively gained control of 74 per cent of Volkswagen's voting shares.
In March, when Porsche was still sitting on a long-held 31 per cent direct stake, it said it was not seeking to increase its holding to 75 per cent, bearing in mind that the state of Lower Saxony holds a 20 per cent stake in VW.
"The speculation of going to 75 per cent overlooks the realities of the shareholder structure of VW," Porsche said at the time.
"In view of the fact that Lower Saxony as second largest shareholder owns 20 per cent of VW, the probability of acquiring the necessary shares in freefloat is extremely low."
Meanwhile on Tuesday a spokesman for German market regulator BaFin said it was looking into the VW share price movement for any sign of insider trading or market manipulation.
Porsche denied it was manipulating the market and said that the market had mixed up cause with effect.
"We vehemently reject the accusation of share price manipulation," a spokesman for Porsche said. "The ones responsible are those that speculated with huge sums of money on a falling Volkswagen share price."
Porsche's statement revealed that it had raised its direct stake to 42.6 per cent, held a further 31.5 per cent in cash-settled stock options and that it intended to increase its holding in the world's third largest carmaker to 75 per cent next year.
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