Wirecard investors remain on roller coaster as shares surge 150%. Can the company survive though?
Shares in Wirecard AG soared over 150% on Monday, with some citing speculation that French group Worldline might try to buy parts of the German scandal-hit payments company which filed for insolvency last week.
Some said it was a dead-cat bounce — meaning a temporary rally that follows a huge decline. The shares, which were trading around at just over 104 pounds before the scandal broke on June 18, plummeted to as low as 1.28 on Friday.
The German payments processor filed for insolvency on June 25, just days after disclosing that more than $2 billion in cash missing from its balance sheet probably doesn’t exist. The former CEO of the German company, Marcus Braun, was also arrested for fraud last week. He reportedly has been released on bail.
On June 27, Wirecard said its business activities are going as normal , despite the filing for insolvency in a court in Munich, and said it was reviewing whether it have to file insolvency applications for its subsidiaries. “With the exception of a small development branch office, no insolvency applications have been filed by Group companies at present,” the company said in the statement that was released.
It also stated Wirecard Bank is currently not part of the insolvency proceedings and that the electronic funds transfer of Wirecard Bank are not affected.
Wirecard shares have soared today on rumours that Worldline, the French payments group, might seek to buy parts of the struggling company.
Worldline is one of a several potential parties interested in acquiring part of the Wirecard portfolio according to news reports. There are also rumours that German authorities will provide funds to save the company. Is the former darling of the stockmarket to big to fail, or will it end with tears for the shareholders having already lost over 95 percent of the investments ?