Earlier today, the company said the euro1.9 billion in cash in question reported by Ernst & Young last week was likely to be non-existent at all.
At the same time, the company reversed its financial results for the first quarter of fy2019 and fy2020.
Self disclosure false account
Share price plummeted over 85%, market value evaporated over 85 billion
The company also said there were signs that the trustee had provided the auditor with a false balance confirmation to deceive the auditor and create a false perception of such cash balances. At present, the companys management is trying to clarify the situation with ey.
As a result, the audit results for fy2019, which were scheduled to be released on Thursday, were delayed. The company said that if it was unable to provide audit results on June 19 local time, it may be required to prepay its 2 billion euro loan.
1.9 billion euros disappeared and wirecard was deeply involved in the false accounting scandal. On Thursday, the stock plummeted more than 62%, the biggest one-day decline in history.
Before Mondays opening, wirecard had fallen 75% in two trading days, leaving a market value of just 3.05 billion euros.
In fact, in September 2018, the market value of wirecard once reached 24.6 billion euros (about 195.1 billion yuan), which replaced the German commercial bank in the DAX index of Germany, alongside Volkswagen, Siemens, Deutsche Bank and other giants.
As of June 18, the market value of wirecard has declined by 83%, leaving only 2.068 billion euros, 10.8 billion euros (85.6 billion yuan) less than the total market value of 12.9 billion euros on June 17.
KPMG warned two months ago
On April 27, 2020, KPMG, one of the four largest international accounting firms in charge of wirecard audit, issued the final audit report. In this report, KPMG did not give a final assurance signature on the authenticity of wirecards financial statements, because the accounting firm was unable to confirm a 1 billion euro acquisition payment.
Hit by KPMGs audit report, wirecards shares fell 26% on April 28, and continued to fall 6% on April 29.
Most of the shares held by the former CEO were forced to close out
Wirecards share price plummeted for two days in a row, and Markus Braun, the chief executive of the company for 18 years, resigned on the 19th, with immediate effect.
Most of the wirecard shares held by the recently resigned CEO are being closed, people familiar with the matter said Tuesday.
Braun, who owns 7% of wirecard, is the companys largest shareholder, according to wind.
At the end of 2017, Braun received a loan secured by 4.2 million shares, almost half of his own, according to a regulatory document, Bloomberg reported.
This led to speculation that Brauns shares were flattened.
Braun declined to comment as of the time of the release.
Soft silver steps on thunder again
Softbank, which has been in water reverse for nearly a year, is also an investor in wirecard.
In April 2019, Softbank acquired 5.6% of wirecards shares at a price of 130 euros per share through a subsidiary using convertible bonds. The transaction cost 900 million euros (about $1 billion).
Now wirecards share price is only around 16 euros, 88% lower than the purchase price at that time.
Short sellers make 18.5 billion in two days
The German monetary authority once banned short selling
Before the wirecard scandal, wirecard was already one of the most short listed stocks.
In January 2019, the Financial Times reported that preliminary investigation found that the German financial technology group had falsified documents and accounting irregularities in several subsidiaries in Asia. After the report was released, Singapore police searched the companys office, and wirecard shares fell sharply.
Because of short selling, the companys share price fell more than 30% from the end of January to the middle of February, so the German monetary authority sold.
Bafin said on its website on February 18 that before April 18, global investors will be immediately banned from establishing new short positions or increasing existing short positions on wirecard, the first time Germany has banned short selling of a single stock. During the financial crisis, regulators banned naked short selling of 11 financial companies.
Affected by the news, wirecard shares rose 15% on the same day, returning to above 110 euros.
According to the German monetary authority, the ban on short selling is due to the economic importance of wirecard, whose share price slump poses a serious threat to market confidence. If short selling is not restricted, there is a risk of further downward spiral in wirecards share price.
John Hempton, founder of Bronte capital, an Australian hedge fund, said they had been shorting the stock for 10 years. During this time, he watched wirecards share price rise from less than 7 euros to 200 euros at its peak in 2018.
But by the end of last Friday, the stock had fallen to 25.82 euros.
Short sellers have made $2.6 billion (18.5 billion yuan) from the stocks collapse in the past two trading days, according to financial analysis firm s3partners.