- Wirecard has requested the opening of insolvency proceedings.
- It is not known whether the trade will pick up again and whether it will attract bargain-seekers.
- The future of subsidiaries may be the key to ETR’s value: WDI
Wirecard has filed for insolvency – on its way to bankruptcy. The German payments company made a dramatic decision after its CEO Markus Braun was arrested – days after WDI failed to find billions of euros. Company officials said debt is the main reason for its filing.
At the time of writing, it is not clear whether Wirecard subsidiaries will also be included in the process. Bloomberg reports that Wirecard Bank is excluded, but that could possibly be decided by BaFin, the German regulator.
Long negotiations could have implications for several commercial banks such as Commerzbank, ING and ABN AMRO.
Will bargain seekers buy the plunge? The Robinhood crowd can hold on to hope that the business will get out of trouble. Apart from its subsidiaries, this depends on whether Wirecard maintains its agreements with Mastercard and Visa.
Wirecard share price
Wirecard AG, traded under ETR: WDI, fell from just over € 100 billion to € 10.74 before trading was suspended. The price of the Munich-based company has fallen to around € 1 according to some reports.
Aside from WDI stocks, Wirecard bonds slumped to six cents per euro – reflecting a 94% loss for those who loaned the company money. This debt is worth around € 500 and will expire in 2024.
WDI shares have fallen sharply for several days.