Munich headquartered payments fintech Wirecard is under severe pressure upon news that €1.9bn of cash is missing.
Specifically, Wirecard’s auditor EY says it is unable to confirm that €1.9bn in company cash is really there.
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That sum equals Wirecard’s accumulated profits over the past seven years.
As for its latest financials, well they are also posted missing. Wirecard was due to post its latest, already late results, on 18 June.
The EY bombshells means that Wirecard is yet to report its latest numbers.
The market reaction is brutal, with the Wirecard share price plummeting by more than 60% from €95 to €39.
Such a share price values Wirecard at around €5bn.
Moreover, Wirecard is now at the mercy of its lenders who could axe loans worth around €2bn. Meantime, its bonds are now trading for less than €0.40 on the euro.
Wirecard cash missing: possible fraud of ‘considerable proportions’
In a video statement (see link) Wirecard CEO Markus Braun said that the firm was working intensively together with the auditor towards a clarification of the situation. Braun added that it could not be ruled out that the firm had been the aggrieved party of a fraud of considerable proportions.”
For fiscal 2018, the most recent full year results available, Wirecard reported total revenue of €2.02bn, up 35% year-over-year.
Net income in fiscal 2018 also rose by 35% y-o-y to €347.4m.
Later on 18 June, Wirecard released a statement saying that Management Board member Jan Marsalek is now suspended with immediate effect on a revocable basis until 30 June.
