On Wednesday June 17th the stock closed at 104.50 euros
Thursday 39.90, down 62%
Friday 25.82 down 32%
Reminiscent of SunEdison circa 2016:
It appears we have entered the realm of one of Zeno's Paradoxes, namely the Paradox of the Tortoise and Achilles, that no matter how many days SUNE drops 50% it never reaches zero. 21 cents, down 22 cents last....To which FT Alphaville's David Keohane, having, during a wayward youth "read all the books" recognized, resonated and linked (thanks David, don't go to Dijon)
And from ZeroHedge:
He may have avoided prison for the time being, but the financial pain for Markus Braun, CEO of the biggest corporate fraud in German history is just starting.....MORE
According to Bloomberg sources, Braun is facing a massive margin call as Deutsche Bank has issued a margin call on a €150MM loan pledged by shares that have lost 72% of their value following news that billions in company cash have gone missing. Braun, who holds 7% of Wirecard’s shares and is the company’s biggest shareholder, did what so many CEOs have done, and funded a €150 million margin loan that was secured by the value of the underlying stock. However, last week's plunge has triggering a margin call liquidation of these shares which no longer cover the full value of the loan.
In 2017, Braun - who has invested tens of millions of euros of his own funds into the firm and owned 8.7 million shares of Wirecard as of June 19 - secured the loan from Deutsche Bank (there's that name again) by pledging 4.2 million shares, or just under half of his personal stake. When the stock was trading above €100/share the overcollaterialization cushin was generous, giving the loan an LTV of well below 50%. However, with the stock now trading at €25, there is a €50MM shortfall in the loan and DB is rushing to collect on whatever it can.
in other words, it would take as much as 6 million shares of Braun's WDI holdings to satisfy the margin loans leaving him with about 2.7 million shares which at a price of €25 means a little over €50 million, which will evaporate in no time on lawyer retainers as the CEO prepares for the legal onslaught facing him (assuming of course the stock retains any value if and when WireCard files for bankruptcy as now appears likely).
The good news for Deutsche Bank is that for once it is not facing a direct loss on this massive fraud because as Bloomberg notes that the bank has since offloaded the risk tied to the position. The bad news is that Deutsche Bank is part of the 15 bank syndicate behind Wirecard's revolver....
