Börse Express – Wirecard stock: from stock market star to bankruptcy within 7 days!

• A chain reaction starts.
• Wirecard-Run leads to bankruptcy and probably to liquidation.
• Ernst & Young and ex-board members in the twilight.

For many investors and observers, it is hard to believe that a DAX group that previously had the best prospects and whose business was flourishing can slip into bankruptcy within seven days (June 25, 2020).

A chain reaction starts

This is only possible due to a chain reaction, which, as is so often the case on the stock exchange, is likely to be excessive again. Wirecard (WKN: 747206) has confirmed that EUR 1.9 billion does not exist in Asian trust accounts. And probably this is just the tip of the iceberg.

Because, as the “Financial Times” has repeatedly reported, it could well be that a large part of the third-party business does not exist. This in turn would mean that about two thirds of Wirecard’s sales never existed.

Conversely, this would mean that the group has not been as profitable for a long time as it stated. In addition to the investors, all investing banks were also duped. They gave loans on the basis of false information. As a result, Wirecard is over-indebted from one day to the next and can no longer operate it.

Wirecard-Run leads to bankruptcy and probably to liquidation

Everyone, be it the customers, the lenders or the shareholders, would like to part with Wirecard as soon as possible. This is a vicious cycle and acts like a bank run, in which all customers withdraw their money at the same time. Although Wirecard certainly has some existing businesses, these now have no chance of survival.

1.9 billion euros is a lot of money, but still only about 27% of the last balance sheet total. The lenders could have agreed on a write-off and thus secured their continued existence, but the developments of the past few days are probably just too fast. As it looks now, nobody is interested in continuing business.

Visa (WKN: A0NC7B) and Mastercard (WKN: A0F602) are already reviewing their business relationships with Wirecard. They are vital for the payment service provider as a partner, since many payments are processed via their networks. The likelihood of a detachment is high because important Wirecard customers have already been informed about this step by Visa and Mastercard.

What will the banks do? On July 1, 2020, 1.3 billion euros are due for renewal, but on what basis should this be done? In short: It looks very bad for Wirecard. Many business partners also turn away. In Singapore, the dispatcher Grab announced that the planned partnership would not begin. And so it goes on and on. Orange Bank and the online bank Revolut also change providers.

Ernst & Young and ex-board members in the twilight

Wirecard’s long-standing auditing firm Ernst & Young now said: “There is clear evidence that this is a comprehensive fraud involving several parties around the world and in various institutions with deliberate deception.”

But why didn’t she recognize this sooner? Of course, it is possible that she was also deceived, but some reports today indicate that there were already clear indications for the 2018 financial statements that 1 billion euros were booked too much.

Former CEO Dr. Markus Braun sharply reduced his Wirecard shares from 8.7 to 3.2 million shares last week (June 18 and 19, 2020), thus securing EUR 155 million. In addition, he was able to free himself from pre-trial detention by depositing a deposit of 5 million euros. Jan Marsalek (former head of operations) is suspected in the Philippines, but now wants to face the judiciary.

We all shouldn’t make hasty blames because we still don’t know who actually got this scam going. However, if the directors were involved, it would only be fair if they gave up their assets and distributed them among the creditors and investors as compensation.

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