Investors need to know that after the price collapses

The British economic newspaper reported an internal report by the Singaporean law firm Rajah & Tann, reporting false accounting practices, fraud, corruption and money laundering. The management who commissioned the study had already received a presentation on May 8, 2018. Wirecard itself again denied the Financial Times report, as it did in the middle of last week, even after the additional information. .

The most important questions investors need to consider at the beginning of the Wirecard week:

What brings on Monday?

In the short term, the payment service provider called a conference call with management at 13:00. For the first time, CEO and shareholder Markus Braun and Chief Financial Officer Alexander von Knoop wish to speak publicly about these allegations. Depending on the course of the teleconference and the facts that invalidate the claims of the "Financial Times", this may depend on how the stock develops at the beginning of the week and continues thereafter.

What are the badysts waiting for?

Analysts become nervous. A clear majority of society is still convinced. Due to the generally uncertain situation, the potential impact of profit claims has not been taken into account in the group valuations.

In the majority of cases, experts base their sales and profit estimates slightly higher than those planned for the past year, which were released last week. According to the Bloomberg financial data provider, 26 badysts recommend buying, four retaining shares and only three selling. This includes Markus Friebel of Independent Research, who does not see the title because of the charges but because of the high rating.

How are technical badysts badessing the situation at Wirecard?

All the technical lines were torn down last. The stock fell below the lines of 20, 38, 50, 100 and 200 days. At the end of last week, she recorded a minimum of six months. The trend that follows, on the followers of this method of evaluation, is clearly downward.

After that, we must fear further price cuts. Before the Wirecard news last Wednesday, the indicators were still largely on the rise. The technical badysis should therefore not be overestimated in its validity at the moment.

Who are the biggest investors in Wirecard?

The largest package, with a stake of 7.05%, has long been held by CEO and founder, Markus Braun, via MB Beteiligungsgesellschaft mbH. The American giant Blackrock came in second place with 6.72%, followed by the British Jupiter Fund Management with exactly 5%, the Americans by Artisan Partners Management with 4.99% and the Citigroup with 4.94%. Most shares are traded freely on the stock exchange.

Which hedge funds are currently betting against Wirecard?

The only known name is currently the British hedge fund Odey Asset Management. On the closing date last Thursday, the Bundesanzeiger holds a net short position of 0.56% of the subscribed capital. According to the Bloomberg Information Service, Odey has bet on falling prices at Wirecard with a position of $ 131.8 million.

Due to the recent fall in prices, the hedge fund realized a book profit of about 18 million dollars. In previous weeks, Odey had already made millions of bets against the British Metro Bank and Intu Properties. He also bet against the pound last.

Other hedge funds speculating against Wirecard are not officially known. However, according to the Handelsblatt, they exist. However, they must only declare their position from a share of one half percent of the issued capital and stay below that mark.

How can speculative individuals profit from sharp price fluctuations?

Large price changes such as those of Wirecard create extraordinary opportunities for investors, which are offset by risks, including total loss. Only experienced investors should be involved here. If you want to be more speculative than with the stock itself, you can buy warrants.

At Wirecard, they offer institutions such as Commerzbank, Goldman Sachs or DZ Bank and Unicredit. The investor must first decide whether he wants to bet on rising share prices (call-warrants) or on the decline (warrants). It sets the underlying, on which it has been speculating for some time on the expected evolution of the price of the title. The investor acquires the right to buy or sell the underlying badet at a specified price in the future.

If speculation continues, the bank will pay the profit at the end. The leverage of such a product, depending on the nature and preferences of investors, can increase profits many times compared to the price of the title. Conversely, in extreme cases, the total loss is a threat if the share price evolves differently from the bets. Of course, money orders are also charged to banks.

Will Wirecard soon reduce forecasts given the turbulence?

No stranger can currently determine the subject of the allegations. Analysts, experts in the capital market, do not dare to do it. That's why all predictions are like wild speculation.

However, if the allegations are not immediately resolved, there is a danger: Wirecard customers could jump in the face of a blurry situation. This could eventually affect profits and put the price under pressure. It is therefore imperative that management remove all grounds of allegation.