23. 5. 2019

KGI Announces Position in Wirecard

Wirecard is a German technological company that focuses on processing of electronic payments and issuing its own credit cards. The company operates primarily within the EU and Asia. Its competition is for example VISA or Mastercard. In recent years, Wirecard’s shares have experienced a rocket growth due to the company’s revenue growth in tens of percent per year.

In early 2019, The Financial Times reported on alleged accounting fraud and suspicious transactions of the company in Asia. Based on a series of articles published in The Financial Times, which were based on a law firm report, Singapore police started to investigate Wirecard and the company’s stock responded with a dramatic decline. Wirecard refused any charges. In the same period, a German market regulator BaFin temporarily stopped trading the volume of short positions of the company’s shares on the basis of a serious suspicion of a planned attack by the so-called short-sellers, influencing media news and market manipulation (Wirecard faced the so-called short-seller’s attack already in 2008 and 2016). Following these events, the German authorities stood up for Wirecard and initiated investigation of the accusation by the Financial Times.

Wirecard reported very good results for Q1 2019, with the company’s revenue increasing by 35% to € 566m, EBITDA rising 40% to € 160m, thus confirming the outlook for 2019.

We have invested in Wirecard shares over the past three months, i.e. from 3/2019, and we believe that the company will continue to implement this year’s plans. We expect that our investment will be appreciated by tens of percent.