Bankrupt company fingers away from the Wirecard share – despite the price high

Symbolic picture: Wirecard
Symbolic picture: Wirecardimago images / Alexander Pohl

The Wirecard share price has been up significantly since the beginning of the year and has soared, especially at the beginning of the week: On Tuesday, the share reached a previous high of 1.72 euros. For comparison: when the stock exchanges opened on January 4th it was 30 cents per title. On Tuesday evening, the share finally closed at 1.04 euros – with a gain of 112 percent. On Wednesday it went down to 1.30 euros.

Wirecard share

Wirecard share chartCourse provider: L&S RT The trading volume has been significantly higher since the beginning of the week than it was at the end of 2020. According to the Handelsblatt, an average of 1.3 million titles have been sold and bought every day since September. On Monday that sum rose by almost ten times. On Tuesday around 70 million shares were traded – and on Wednesday the volume was 23 million shares by early afternoon. On the Stuttgart stock exchange, Wirecard was even considered the most widely traded shares until early afternoon.

Speculation on Social Media

The high price of the scandal group caused astonishment and distrust on social media, since the share has been remembered mainly because of its bottomless fall since the payment service provider became aware of the fraud: after the auditor EY refused the certificate on June 18, the Share by almost 70 percent in value within 24 hours. After that, the price continued to decline – reinforced by further revelations – until it reached its previous low of 30 cents at the end of the year.

On Monday, the first users asked on Twitter what the sudden price increase was all about.

And also on Instagram users posted amazed the price charts of the past few days:

In any case, the latest developments are not related to the situation at the insolvent payment service provider: The group is now being wound up, its former boss Markus Braun is in custody, ex-CEO Jan Marsalek is on the run and is wanted by an arrest warrant. Headlines about Wirecard are exclusively negative and are related to new revelations about balance sheet fraud.

Some social media users therefore suspect that there are short sellers behind the price high, which could have placed bets on the development of Wirecard shares. The increased demand is therefore a consequence of the attempt to close the short sales. However, this is contradicted by the fact that the shares that have been shorted so far only make up a fraction of the volume last traded. According to the Handelsblatt, the proportion of shorted stocks has also been at a high level since the summer – although the stock had already lost most of its value back then. According to this, the majority of shortsellers are betting on a further decline in prices – and thus an exactly opposite trend.

Instead, speculators and so-called day traders are increasingly coming into focus. They try to profit from price fluctuations on the stock exchange by buying and selling shares within a short period of time. Pennystocks in particular – stocks with a price below one euro – are popular with such speculations. But here, too, the level of knowledge so far does not go beyond assumptions.

The following applies to investors: stay away from Wirecard shares

Even if the reasons for the surprising price high remain unclear for the time being, investors should by no means be tempted to buy Wirecard shares. As early as the end of June, Frankfurt correspondent Stefan Schaaf warned on “Stay away from the remnants of Wirecard on the capital market, ie the share and the one outstanding bond.”

Whatever substance is still in the company, goes to the tax office and social security in the course of processing. Then the creditors would be served. It is uncertain whether there will be anything left for bond investors. But it could not be much and one would have to wait years for payments. In any case, the shareholders who, as the owners of the company, still lag behind the creditors, would go away empty-handed.

This conclusion has not changed even six months later: Wirecard shares are almost worthless – and it will stay that way.

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