Sat, May 18, 2024

Once-Thriving Company Wirecard and Latest Scandal

Stocks and Wirecard

Wirecard is no stranger to scandals. However, the latest scandal created additional problems for the German digital payments company. However, there was a time when this company was one of the most promising tech firms in Europe. Wirecard processes payments for consumers and businesses and it sells data analytics services.

Importantly, it has nearly 6,000 employees in 26 countries around the world. In 2018, the firm revenues reached more than $2.2 billion. Thus, compared to 2013 revenues grew by more than four times.

Moreover, in 2018 shares reached an all-time high above $213 in September. Furthermore, the same month, the company replaced Commerzbank in Germany’s list of top 30 companies. As a reminder, at that time the firm was worth more than $26.9 billion. Nevertheless, at the beginning of this week, the stock was trading as low as $14.56. Consequently, Wirecard’s value fell to less than $2.2 billion.

Wirecard and interesting detailsWirecard and financial problems

As mentioned above, the company was struggling to cope with problems even before the latest announcement. Wirecard made an interesting announcement on June 22. According to the tech firm missing $2.1 billion its auditors were unable to locate probably never existed.

It is not surprising that shares in Wirecard dropped on Monday. The firm’s market value fell by billions of dollars during the last several days, since its auditor decided not to sign off the company’s accounts.

Also, Wirecard decided to withdraw its preliminary results for 2019. Moreover, the digital payments company also withdrew its profit forecast for 2020. Importantly, Wirecard warned that financial results from previous years may also be affected.

Last but not least, Ernst&Young said that it was impossible to locate the cash, which makes up roughly a quarter of the company’s assets. The Ernst&Young made this announcement last week. It won’t be easy to solve all of the problems and the company’s CEO left the company.

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