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Wirecard Shares on the way of Becoming a Penny Stock !


Wirecard has filed for bankruptcy and the business, or what is left of it, practically belongs to the creditors. Nevertheless, the Wirecard share behave on the DAX almost as if nothing had happened.

At the beginning of the week, it was still well on the way to becoming a penny stock, falling below the value of one euro per share. Then a strong, albeit short-lived recovery came out of nowhere, which almost brought the share back up to 10 euros, but at some point, however, the reality started again and the rate quickly fell back to a few euros. The price is currently 3.45 euros (as of 03.07.2020), which means that the company is still valued at a completely Utopian 350 million euros!

No hope for shareholders

One thing should be clear: the shares are actually no longer worth anything and sooner or later it will have to fall to a value close to 0. After the bankruptcy, the Wirecard share no longer represents a stake in the company, but ranks last in the long queue of creditors and  this line is very long.

On the one hand there are the banks that have lent Wirecard more than 1 billion euros and on the other hand there is a bond in the amount of 500 million euros. Only when the banks and bond holders have received all of their money back will Wirecard shareholders have a chance to see some money.

The price of the bond shows how unlikely this is. It is only a few cents per euro borrowed and bondholders expect to see only a fraction of their investments ever again. Lending banks are also reportedly looking for buyers of at least part of the loan granted and here too, one seems to expect only a few cents per euro borrowed.

There is therefore practically no chance for shareholders to get an equivalent value for the purchase of the Wirecard share. But why did the price rise so much?

Speculators have a firm grip on the Wirecard share

Well, on the one hand, a large part of Wirecard’s shares had been sold short to bet on a falling price and some market participants borrowed shares and then sold them in the hope of being able to buy them again later at a lower price. These short sales must now be balanced again and short sellers must therefore buy shares on the market in order to be able to return the borrowed shares.

Under certain circumstances, this can drive up the price.

On the other hand, speculators are obviously at work at the moment and they buy the shares in the hope that there is someone who wants to buy them later for a higher price.

The strong price fluctuations of sometimes more than 100% in one day only attract more speculators.

With a little luck, you can surely make a lot of money in no time but the only problem is that gambling of Wirecard shares inevitably has to come to an end at some point in time and you don’t want to be the last one to hold on those highly toxic shares as they become worthless one day.

No matter how you look at it, there is no way around it:

The Wirecard share will soon become penny stock and will certainly leave the DAX.

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