One of the high flying financial technology companies in Germany has come crashing to the earth. Wirecard joined the German blue chip Dax index in late 2018 and trade above E200 and is now trading at E20 or E10 billion ($11.17 billion) value has been wiped out. The shares are now trading at pennies.
Wirecard is a payments company and is missing $2.85 billion which according to a whistle blower is not surprising because there is a web of sham transactions. Wirecard is trying to keep the company together however its auditors Ernst & Young would not sign off on its accounts. The accounting company did sign off on previous years. Lawsuits have been filed was Wirecard legit or a house of cards?
Linking to dividend paying stocks, we have seen Enron and others do accounting fraud, high flyers come down to earth and you think why did I buy some of its shares? The important part if you did keep the position weighted so the stock may go up and down but your total portfolio is in balance or can weather any storms. If you the bulk of your portfolios you sometimes miss the high flyers, but when they come down to earth you miss that too. Rule number one of investing is try not to lose your money.
There are more questions than answers, till the next time – to raising questions.