OT - A Reminder

This is just a reminder that every discovery and accusation of fraud at a company isn’t just a short attack. Some are real. We recently had Luckin Coffee. Now we have Wirecard, one of Germany’s 30 largest companies. Really a shock.

German payments company Wirecard has filed for insolvency proceedings, a week after auditors found a €1.9B hole in its balance sheet and an admission by the company that the money may never have existed. Shares were suspended from trading before the announcement, but have fallen nearly 90%, wiping out almost $12B of market value since the disclosure last week. CEO Markus Braun was also arrested on suspicion of falsifying accounts at the company, which processes tens of billions of euros in credit and debit transactions every year. Once the darling of Germany’s fintech world, Wirecard (OTCPK:WCAGY) eventually ascended to the DAX, the stock index of Germany’s 30 largest companies.

This is OT, and just a reminder, so additional comments are not necessary.



This is OT, and just a reminder, so additional comments are not necessary.

In case it was my post that triggered this reminder let me say that I did the requisite research before adding more ENPH.

The fraud by Luckin Coffee and the “hole” in Wirecard were reported by auditors. In the case of Enphase Energy the complaint was reported to the lawyers by a short seller. I can no longer find the week old PR piece from the lawyers but instead of the innocuous current announcement

The complaint alleges that throughout the Class Period, defendants made false and/or misleading statements and/or failed to disclose: (1) its revenues, both U.S. and international, were inflated; (2) the Company engaged in improper deferred revenue accounting practices; (3) the Company’s reported base points expansion in gross margins were overstated; and (4) as a result of the foregoing, Defendants’ public statements were materially false and misleading at all relevant times.

the original one included the name of the short seller. Not only that, but about half a dozen law firms were alerted. If it walks like a duck and quacks like a duck…

Denny Schlesinger