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Wirecard Shares on the way of Becoming a Penny Stock !

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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 After the bankruptcy, the Wirecard share no longer represents a stake in the company, but ranks last in the long queue of creditors and  this line is very long.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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Holvi Mastercard temporarily suspended due to Wirecard insolvency

Wolfgang Holzem

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Holvi Mastercard has been temporarily suspended due to recent events in connection with the insolvency of Wirecard AG

How did this happen?

The UK Financial Conduct Authority (FCA) has suspended service for Wirecard Card Solutions Ltd (WDCS) earlier today. WDCS is a subsidiary of Wirecard AG and issues the Holvi Business Mastercard. This decision was taken by the FCA without any prior notice.

What does this mean for you?

All other functions of your Holvi account are still fully available. You can still invoice, receive and transfer funds. Please be assured that all Holvi customer accounts and funds remain safe, secure and accessible at all times – no Holvi accounts have been impacted by this event. This is because all Holvi customer funds are segregated and held in separate accounts in European banks in Finland, Sweden, Denmark, the UK and France.

No customer funds are held by Wirecard AG. Your money and Holvi account are safe.

Your trust is our top priority. We’re actively working on a solution and will continue to update as soon as possible.

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Wirecard Board wants to continue Business in the UK and discussion are ongoing with the FCA

Wolfgang Holzem

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The payment processor struggling to survive a balance sheet scandal Wirecard, continues to do business despite the application for bankruptcy. “The board is of the opinion that a continuation is in the best interest of the creditors,” said the Dax group on Saturday in Aschheim near Munich.

The management board made an application for the opening of insolvency proceedings for Wirecard AG last Thursday.

According to the company, the examination of whether insolvency proceedings will be opened continues.

The business operations of the group companies including the licensed units are currently being continued, it said. It is constantly checked whether bankruptcy applications for subsidiaries of the Wirecard Group must also be made. Group companies, with the exception of a small development branch, have currently not filed for bankruptcy.

The Wirecard Bank is currently not part of the bankruptcy proceedings, the payment transactions of the Wirecard Bank are not affected, the company emphasized. Payments to Wirecard Bank merchants would continue to be carried out without restrictions. They are also “in constant communication with the credit card organizations”.

Wirecard Card Solutions has interrupted business

Wirecard Card Solutions Limited, based in Newcastle, “has interrupted its business due to an order from the responsible Financial Conduct Authority,” it said. However, Wirecard hopes to be able to continue operations in the UK with its current global B2B clients.

Current B2B clients include Payoneer, Hovi, Curve.

Measures for this are discussed currently with both the UK and German authorities.

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Thousand’s of Payoneer Mastercard Holders still Affected by Wirecard UK and can’t Access their Funds in Pakistan Bangladesh & Balkan countries

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Many of Payoneer’s millions of Freelancers have their freelance work paid into the card account, which is easier to open than a bank account in countries such as Pakistan, Bangladesh, Venezulea, Argentina and Balkan countries.

According to reports on Facebook, it is assumed that thousands’ of Payoneer Card holders are still unable to access their funds in Pakistan, Bangladesh and in Eastern European countries. Payoneer card holders within the European Union and certain countries outside the European Union face no restriction and AirBNB Host users are also able to withdraw funds, available on their cards.

Ring-fenced cash

Funds held by e-money firms like Wirecard are not guaranteed up to £85,000 as bank deposits are, although they are held in banks such as Barclays and will be safeguarded.

Payoneer has told customers: “Your funds are being held by Wirecard in a ring-fenced designated account with Barclays. This means in the event of Wirecard going bust you are protected.”

Even so, the FCA is anxious to make sure no money is siphoned off because of Wirecard’s collapse in Germany.

Christopher Woolard, the FCA’s interim chief executive, told the BBC’s Today programme the FCA had “imposed very strict conditions” on Wirecard’s UK subsidiary based in Newcastle, which had knock-on effects for about 70 payments firms, including some firms that operate out of the United Kingdom and the European Union.

Mr Woolard said the FCA had spent the last few days making sure money belonging to people in the UK and the European Union was now safeguarded in UK bank accounts with strict conditions.

The auditor of EB (Ernst & Young) signed of the full accounts made up to 31 December 2018 and according to the official Financial Statement, Wirecard Card Solutions Ltd held 465 million GBP in Customer Deposits.

WCSL has not filed the Financial Statement for 2019, but it is assumed that customer deposits of around 600 million GBP was frozen when the FCA suspended last week’s Wirecard operating in the United Kingdom.

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