Wirecard Shares Surge As Investors Offer To Buy Insolvent Payments Company

As five dozen suitors with the backing of more than 130 investors have lined up to buy what’s left of Wirecard AG, the German payment company’s stocks soared by as much as 37.5 percent in Frankfurt on Monday (July 27) — the steepest gain since June.

Michael Jaffe, the company’s insolvency administrator, said Wirecard has enough liquidity to keep operating for the time being. The bidding is expected to start next month, and Jaffe said he is confident of finding buyers, Bloomberg News reported.

The $28 billion FinTech leader was once the envy of Europe. But the company filed for insolvency last month after it reported debt of nearly $4 billion when it revealed $2.1 billion went missing from two Philippines banks.

Shares of Wirecard AG hit an intraday high of 199 Euros (about $234) in September 2018. But the value of shares was wiped out by its insolvency filing. In June, shares bottomed out intraday at 1.08 Euros (about $1.27) as questions swirled around allegations of fraud. However, Monday’s news sent Wirecard as high as 2.186 euros ($2.57) in Frankfurt before shares pulled back a bit to close at 1.8364 euros ($2.16) — up 15.5 percent on the day.

Also on Monday, a high-ranking German regulator has called for major changes in response to the Wirecard scandal. Bundesbank President Jens Weidmann said auditing should be enhanced.

“Wirecard is a scandal, and we have to do more to prevent it in the future,” Reuters quoted Weidmann as saying, adding that he called for more powerful auditing and accounting processes. “For example, the audit process and the tasks, powers and liability of auditors should be reconsidered,” he said, according to Reuters.

Last month, PYMNTS reported Wirecard North America Inc., a separate company from Wirecard AG, was listed for sale. The Pennsylvania-based firm, which calls itself a self-sustaining entity, substantially autonomous from Wirecard AG with more than 20 years in the payments industry, has hired an investment bank to manage the sale. The bank involved in the transaction was not named.

(This article has been updated to reflect Wirecard’s closing price.)