Wirecards big brother BaFin against Financial Times – who will win?
Wirecard and BaFin:
The German Financial Authority (BaFin), prohibits at this moment 2019-02-18 short selling in the German DAX company Wirecard. Something like this with BaFin interfering has not happened since the financial crisis 10 years ago. Investors globally are immediately prohibited from taking new short positions or increasing existing ones through april 18 according to BaFin.
Why the bann on short selling?
The main reason is the recent strong turbulence that can bring distrust to the German financial stock market. People investing in Germany can lose cofidence in German stock market DAX. Thats why this is the first time since financial crisis 2008 that BaFin interferes and prohibits short selling in Wirecard.
Reaction on Wirecard share:
During Monday, the news also came that the Prosecutor of the State of Munich began a preliminary investigation into the market manipulation of the journalist at the Financial Times who wrote the articles on Wirecard. Following the news, the Wirecard share rises by just over 10% on the Frankfurt Stock Exchange on the opening 2019-02-18 it ended with over 15%.
In recent weeks, the Wirecard share has been very volatile and nervous. The strong volatility began when the Financial Times (FT) on January 30 published an article claiming that the company’s Singapore operations may have cheated on the financial figures. Wirecard has several times strongly denied the information in the newspaper article and clamied it to be false.
They replied on their official site with some statements:
We will use all available legal means to protect the company and in particular our employees and their personal rights.
Wirecard is taking legal actions against FT and its unethical reporting.
In total, FT has published three articles on the same theme. At each publication, the Wirecard share has fallen drastically.
Its lowest level so far reached its share on Friday, February 8, when the police in Singapore investigated Wirecard’s local office. It felt way below 100 euro per share. Wirecard has said that they will fully cooperate with the police. The full investigation will take a couple of weeks.
After the third Financial Times article there have not been any new facts, nor from Financial Times or Wirecard. We are still waiting.
The company denies that there would be any irregularities and believes that it is probably someone or someone who wants to make money from a falling stock price. I personally think that someone or some group of people made a lot of money on this short selling attack.
At the same time, an internal investigation is under way by the company if something happened in the office in Singapore. This company has promised to release as soon as it arrives within the next few weeks.
In 2016, the Financial Times published critical articles where the company was accused of having washed money, among other things. These data have not proved correct.
”2008 and 2016, the Wirecard share was exposed to so-called“ Short-Attacks ”. The short-attacks were followed by and favored by negative reporting in the media, ”BaFin writes, among other things, in today’s motivation.
Last week, the German newspaper Frankfurter Allgemeine Zeitung (FAZ) published the information that at least one of the short sellers knew in advance that FT ( Financial Times ) would publish a negative article on Wirecard.
German financial supervizor BaFin is already investigatin on market manipulation. The step of banning short selling in the share are shows that the information can be true.
Short seller or Blankers:
The largest public short seller in the Wirecard share is the American Slate Path Capital, which has shorted 1.5 % of the capital in Wirecard. The second largest is Odey Asset Management with 0.77% of the shares shorted, according to the German Bundesanzeiger.
However, just over 8 % of Wirecard’s shares are blanked. It is an unusually high figure for being a DAX company and also one of the highest. But still you have to have respect for the blankers mostly they do know something we others dont.
Wirecard is valued at 12 billion Euro. The share is traded at the price of around 110 euros. The 27 analysts who monitor the share have largely not changed their target prices after reporting from the Financial Times. The average target price remains around 200 euros, according to Marketsceener.
Munich-based Wirecard is one of the world’s fastest growing digital payment solutions companies. The company has existed for 16 years and has just over 4,500 employees.
In 2018, Wirecard made no less than three reverse winnings! In November, the company became part of the index for Germany’s largest and most widely traded company DAX30 but also the most blanked.
What do you think? Did FT again made false article? Where will Wirecard share stand at the end of 2019? Feel free to comment.
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