Wirecard Investors Remain On Roller Coaster As Stocks Rise 150%

Shares in Wirecard AG WDI,
+ 154.48%
More than 150% soared on Monday, with some speculation that French group Worldline may try to buy parts of the German scandal payments company that filed for bankruptcy last week.

Others said it was a so-called dead cat bounce: speaking on the market for a temporary recovery that follows a significant decline. The shares, which were trading at around 104.50 euros before the scandal erupted on June 18, plummeted to 1.28 euros on Friday. The stock rose more than 150% on Monday to € 3.26.

The German payment processor filed for insolvency on June 25, just days after revealing that there is likely to be no more than $ 2 billion in cash on its balance sheet. The former CEO of the German company, Marcus Braun, was also arrested for fraud last week. He has reportedly been released on bail of € 5 million.

On June 27, Wirecard said its business activities continue, despite filing for insolvency in court in Munich, and said it was reviewing whether it would have to file insolvency claims for its subsidiaries. “With the exception of a small development branch, the Group companies have not currently filed for insolvency,” the company said in a statement.

He added that Wirecard Bank is not currently part of the insolvency proceedings and that Wirecard Bank’s electronic funds transfer is not affected.

“Wirecard shares have soared today in talks that French payment group Worldline could try to buy parts of the struggling company,” said David Madden, market analyst at CMC Markets.

In an article published on June 26, the German newspaper Frankfurter Allgemeine Zeitung reported that Worldline is one of several potential parties interested in acquiring part of Wirecard’s remaining portfolio.

“While Wordline has not yet responded to the article, it is consistent with our view that the Worldline / Ingenico ING merger,
+ 0.79%
they would be potential beneficiaries and / or suitors for clients wishing to leave the platform, “Jefferies analysts wrote in a note to clients on June 29.

“Worldline with our view that the merged entity WLN / ING will be a net beneficiary of WDI’s problems, thanks to its pan-European takeover bid, strong position in the DACH region, online processing capabilities, and vertical expertise key, “Jefferies analysts said. wrote

But they said they remained “cautious about the size of any acquisition, noting that WLN / ING are equally well positioned to capture clients organically that would move away from an insolvent WDI platform, noting that in the months before WDI’s insolvency clients projects had already been postponed. “

Jefferies ‘research team also noted that Worldline could face competition for its rivals’ customers, including Dutch online payments firm Adyen WLN,
+ 0.91%,
German payment group Concardis. First Data, Evo Payments EVOP,
+ 2.15%
and Elavon

Wirecard shares briefly shot up 195%, but fell to 152% at € 3.39 in mid-afternoon European trading.