Wirecard should be wiped out of the German blue-chip Dax index, weeks after the spectacular collapse of the payment provider in insolvency following the revelation of a long-running fraud.
Once the country’s most famous financial tech group, Wirecard was first promoted to the Dax – which includes Germany’s 30 leading companies – in 2018, when it replaced the sick Commerzbank.
But after ongoing reports of accounting irregularities, the company Aschheim admitted in June that it was missing € 1.9 billion in cash, causing its shares to almost lose their value in a rapid fall of grace.
At its height, Wirecard shares traded at almost € 200, but it will leave Germany’s prestigious index with its shares not much more than € 1 each.
Although Wirecard filed for insolvency shortly after its admission, Deutsche Börse, which manages the Dax, was not planning to test the constituencies of the index until September.
To the pressure of investors, the group pushed through a rule change to remove Wirecard sooner than planned. From now on, Deutsche Börse will be able to liquidate a company within two trading days after filing for insolvency.
The company is also required to conduct an “in-depth review” of Dax’s rules.
Delivery Hero in Berlin, which has benefited from a rise in takeaway food orders during the Covid-19 pandemic, will take its place in the Dax Wirecard from Monday, despite doing no major business in the country.
The startup, founded nine years ago, went public for the first time in 2017, and now operates in more than 40 countries in Europe, Latin America, Asia, the Middle East and North Africa.
However, it has not yet posted an annual profit, and sold its German brands, including Foodora, Lieferheld and Pizza.de, to Dutch competitor Takeaway.com last year.
“Entering Dax is a recognition that the capital market believes in our platform,” said Niklas Östberg, Chief Executive Officer and Co-Founder of Delivery Hero.
In July, Delivery Hero increased its year-over-year revenue support by about € 200 million, or roughly 8 percent, as orders in Asia, its largest brand, nearly doubled during the coronavirus crisis. Sales in Europe also rose by 47 percent.
The company is the second company in Berlin based this year after the Dax, after ownership group Deutsche Wohnen took its place at Lufthansa in June.
Wirecard’s removal from the Dax leaves the index with only one pure software component, the enterprising tech giant SAP, which was founded almost 50 years ago.
Wirecard will also be removed from the TecDAX index.
