Wirecard spikes on report SoftBank is considering an investment

  • Wirecard’sUS-listed shares had a wild trading day on Tuesday.
  • They fell 2% after a short-sale ban expired before spiking as much as 13% on the news that SoftBank was considering an investment.
  • The German payments company has been under fire from short-sellers due to financial irregularities in its Asian business.
  • Watch Wirecard trade live.

Tuesday was a volatile trading day for the German payments company Wirecard.

US-listed shares fell by as much as 2% Tuesday morning after a controversial ban on short sales expired. The ban was put in place by the German financial regulator BaFin as the company began to attract the interest of short-sellers due to financial irregularities in its Asian business.

Later in the day, however, shares recovered and even gained as much as 13% following a Bloomberg report that said the venture investor SoftBank was exploring a stake of up to 5% in the company. The deal would be done through the acquisition of convertible debt in Wirecard shares, people familiar with the transaction told Bloomberg.

The global ban prohibited investors from taking new short positions on Wirecard or increasing existing ones. In February, the noted short-seller Fahmi Quadir of Safkhet Capital strongly criticised the ban in an open letter to BaFin.

Short-sellers have targeted the company as it has come under fire after The Financial Times alleged that a senior executive in the firm’s Asian business was suspected of backdating forged contracts in a string of suspicious transactions.

SoftBank’s Vision Fund, led by Masayoshi Son, has over $US100 billion in committed capital for tech investments. Son first came to prominence as an initial investment of $US20 million in Alibaba is now worth more than $US100 billion. SoftBank could potentially enhance Wirecard’s business through tie-ups with portfolio companies such as Uber and Alibaba.

Wirecard is set to report its financial results on Thursday, April 25. Shares were down 5% year to date.

Wirecard stock chartMarkets Insider

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