S&P 500
Wirecard share price plummeted today after the company postponed its annual report once again. This is after the company’s auditors found that an escrow account containing more than $2.14 billion did not have the right certificate. Wirecard now becomes the worst-performing company in the DAX index this year, having dropped by almost 66%.
Wirecard is also the smallest company in the DAX index by market cap. It now has a market cap of €4.64 billion. If the problems continue to mount, there is a possibility that Wirecard will be removed from the DAX index.
Wirecard is known as the biggest financial technology in Germany. As a result, the company has seen significant growth in modern times. It is so influential such that the company replaced Commerzbank in the blue-chip DAX index.
Now, the company is in trouble. The problems started last year when the Financial Times started an investigation into the firm after whistle-blower allegations. The whistle blower alleged that the company was using shell companies abroad to “cook” the financial statement. Wirecard and its management disagreed with these allegations.
After the report, the firm’s supervisory board appointed KPMG to investigate the company. In its report almost a month ago, KPMG cleared the firm of any wrongdoing but cited a tough time in its research. For example, the company refused to hand it important information. Shortly afterwards, Wirecard share price tanked after law enforcement officers conducted a search as part of an investigation by BaFin.
Today, EY – the firm’s auditor – said that there was no evidence that funds amounting to EUR 1.9 billion were available. As a result, the company decided to postpone its financial statements that were scheduled for June 18 this year.
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The weekly chart below shows that Wirecard share price has been in a strong downward trend since peaking at €199.75 in September 2018. The price reached its lowest level since June 2016 today. It is also below the 50-day and 100-day exponential moving averages and slightly below the 78.6% retracement level. At this point, the trend of Wirecard share price is bearish because of the rising risks. There is also a possibility that the price will retest today’s low of €34.18.
On the other hand, a move above €94 will invalidate this trend. This price is along the 61.8% Fibonacci retracement level.