Precious metals

Will investors in the face of the recent Fintech scandal increasingly turn to tangible investments again?

The recent financial scandal involving German payment services provider Wirecard, although a few years old, continues to leave its mark on the markets. The failure to find 1.9 billion in its balance sheet has led to a significant loss of confidence. This crisis raises questions about the appropriateness of investing in opaque technology companies, highlighting the risks inherent in value assessment and elusive corporate practices.

The scandal has been dubbed 'Germany's Enron', and the spectacular fall in Wirecard's share price (around 99%) has had repercussions for the DAX, which had already been affected by the Covid-19 crisis. This situation has shaken confidence not only in fast-growing technology companies, but also in the German financial authorities and the financial market in general.

The in-depth investigation by Financial Times journalists revealed accounting manipulations and dubious transactions, confirming suspicions of wrongdoing. Investors, attracted by the company's rapid growth, were misled by artificially overvalued shares. Wirecard's collapse resulted in significant losses for direct shareholders, but also for indirect investors through funds, ETFs and structured financial products.

The consequences of the scandal extend beyond direct investments, affecting Swiss pension funds and various structured products traded on the Swiss stock exchange. Investors, attracted by the heightened volatility in times of crisis, find themselves faced with the prospect of substantial losses.

This scandal highlights the risks associated with individual shares and complex financial products. It highlights the volatility of markets, where the value of a company can suddenly be compromised, calling into question underlying security and regulatory oversight.

In conclusion, the Wirecard scandal is prompting investors to reconsider their investment choices. The search for safer havens and increased vigilance against opaque companies will redefine investors' priorities in 2023.

(1) https://www.manager-magazin.de/finanzen/boerse/wirecard-aktie-wird-zum-spielball-von-spekulanten-a-1308076.html
(2) https://www.nzz.ch/podcast/wirecard-aufstieg-und-fall-eines-boersenstars-nzz-akzent-ld.1563189
(3) https://www.srf.ch/news/wirtschaft/bilanzskandal-bei-wirecard-das-vertrauen-ins-unternehmen-ist-dahin
(4) https://www.nzz.ch/finanzen/wirecard-aktie-darum-liebte-die-struki-branche-sie-ld.1563133?reduced=true
(5) https://www.br.de/nachrichten/wirtschaft/kommentar-nach-wirecard-skandal-wirkt-boerse-wie-eine-zockerbude,S2HUjgw
Image: https://www.flickr.com/photos/157270154@N05/26707092409

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Author : S.M.

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