- Wirecard stock has cratered about 85% over the past week amid a multibillion dollar accounting scandal. Bank of America sees shares tumbling even further.
- The firm lowered its price target for the slammed stock to one euro from 14 euros on Wednesday in a note seen by Bloomberg.
- Wirecard has fallen under intense scrutiny over the past week after revealing it lost $US2 billion from its balance sheet. Since the first announcement, it’s suggested the sum never existed and former CEO Markus Braun was arrested.
- A clear look at the firm’s true value “is unlikely to arise for some time” as clients are likely to flee Wirecard, analyst Adithya Metuku said.
- Watch Wirecard trade live here.
Analyst Adithya Metuku lowered his target price on Wirecard shares to one euro from 14 euros on Wednesday, marking the latest major loss of faith in the German fintech company. A clear look at the company’s underlying value “is unlikely to arise for some time,” he said in a note seen by Bloomberg.
Wirecard has been mired in scandal over the past week after reporting $US2 billion went missing from its balance sheet. The firm said Monday the sum likely never existed and that, if it is unable to update its financials by the end of the week, it would likely need to cancel $US2 billion in loans it had received. CEO Markus Braun left Wirecard on Friday and was arrested Monday night, accused of falsely boosting the company’s balance sheet.
The days of negative developments weighed heavily on Wirecard’s share price, pushing the stock to 17.58 euros by Tuesday’s close after trading above 100 euros just one week earlier. Lasting damage to the firm’s reputation will push a full recovery far down the road, Bank of America said.
“Recent news flow suggests that customers may have started to leave Wirecard and lenders may be weighing closure of credit lines,” Metuku wrote.
Wirecard traded at 13.25 euros per share as of 8:30 a.m. ET Tuesday, down 88% year-to-date.
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