Wirecard AG investor relations material

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Wirecard was an international payments and risk management solutions provider that was exposed as a fraud in 2019. The company claimed to offer its payments technology solutions to over 280,000 businesses worldwide, and was at its peak one of the largest technology companies in Europe. Wirecard is still regarded as one of the biggest corporate frauds to date, and its rich history involves the mafia, a failed takeover attempt on [Deutsche Bank](https://quartr.com/companies/deutsche-bank-ag_3934), Russian intelligence agencies, an imprisoned CEO, and a mysterious COO still on the run (2022). ## The Rise of Wirecard The company was founded during the dot com craze in 1999. In 2002, the later imprisoned Markus Braun joined as CEO, and the company began focusing on online payment services for clients. The gambling industry and other questionable industries were early adopters of Wirecards online solutions. By doing a reversed merger of InfoGenie AG—a call center group that had gone out of business—Wirecard entered the German Neuer Markt in 2004. This action has been criticized as an avoidance of scrutiny which would have happened during a proper initial public offering. Two years later, Wirecard was added to the TecDAX index, and then to the DAX index in 2018. At its peak, Wirecard was valued at roughly €27 billion, making it one of the largest technology companies in Europe. ## The Downfall In 2015, a critical short report surfaced, leading to short-term pressure on the stock. The previously unknown entity behind the report named Zatarra Research prompted BaFin - Germany’s financial regulator - to launch a market manipulation investigation. The report alleged that Wirecard's Asian operations were much smaller than claimed and that the company took only a small commission from its payment processing volume. The transient payment flow through Wirecard's accounts was adjusted to reflect Wirecard's small cut. Despite these allegations, BaFin took little action against Wirecard before its eventual collapse. Instead, it filed complaints against the company's critics and short sellers of the company’s stock. In fact, it was not until a Financial Times article was published in 2019 that the market finally took the fraud allegations seriously. The Wirecard stock price was a roller coaster ride from there on out, but sell-side analysts were almost universally positive about the company until February 2020. Analysts at [Goldman Sachs](https://quartr.com/companies/the-goldman-sachs-group-inc_4954) had a "Conviction Buy" rating until as late as September 2019. [Commerzbank](https://quartr.com/companies/commerzbank-ag_5937) analysts who were positive on the shares even dubbed Financial Times’ articles "fake news." [Bank of America Merrill Lynch](https://quartr.com/companies/bank-of-america-corporation_4043) was among the very few skeptics. In 2018, they questioned Wirecard's poor positioning within the German e-commerce payments market and raised concerns related to financial controls. ## The Aftermath In June 2020, justice was served. Wirecard filed for insolvency after a third-party accounting investigation discovered that €1.9 billion was, in fact, “missing," and the CEO, Markus Braun was arrested. Wirecard’s stock price fell by almost 80 percent on the day of the announcement. The COO at the time was Jan Marsalek - who disappeared shortly after he was fired from the company. Today (2022) he allegedly hides in Belarus and is a fugitive listed on Europool’s list of Europe's most wanted fugitives.

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