“Since the end of last January, there have been several negative reports about the company in the press, between January 30 and February 15, 2019, the share price fell from 167 euros to 99 euros, that supposes a loss of market capitalization of 40%, “said BaFin, noting that a collapse of the share price could be seen after the publication of an article in the press alleging that employees of a Wirecard subsidiary in Singapore would have manipulated the accounts to report a higher income than the real ones.
The price of the shares of the payment services firm Wirecard has rebounded on Monday 15.12% on the Frankfurt Stock Exchange, up to 115 euros, after the German Financial Supervision Authority (BaFin) issued an administrative order prohibiting the establishment of short positions or the increase of those already adopted for a period of two months.
Wirecard shares were at 108.5 euros after the bell in Germany, reaching an intraday maximum of 116.35 euros and a minimum of 105.05 euros. The actions of the fintech specialized in payments closed last Friday at a price of 99.9 euros.
On September 3, the company’s shares reached their historic high of 195.75 euros for each title. The biggest drop came last month, when the Financial Times reported that an internal preliminary investigation had uncovered falsified documents and accounting irregularities in the German fintech.
The prohibition adopted as a matter of urgency by the German CNMV, which has come into force on Monday and will remain in effect until midnight on April 18, is supported by the European Securities Markets Authority (ESMA).
In this sense, the German supervisor has underlined that the information in the press coincided with increases in net short positions and with higher levels of volatility in the price of Wirecard stock, appreciating since last February 1 a significant increase in short positions in the value. “These positions are held by several holders, particularly foreigners, and partially at levels below the notifiable threshold,” the authority added.
In this way, BaFin has justified its decision to temporarily ban Wirecard short films in which the events described have caused uncertainty in the market, particularly with regard to setting an appropriate price for Wirecard shares, and warned that “in the current situation there is a risk that this uncertainty will increase and infect the market in general”.
Likewise, the rebound in the shares also coincides with the expansion of the investigation of the alleged irregularities committed by Wirecard to the Financial Times journalist who published the information about the company.
Also published on Medium.