Case study period 2

   Work   
The case study deals with the analysis of a real event. It especially looks at the impact of the
event in financial markets. The event could be about a firm, the economy or the world.

A few examples: announcement of the financial results or launch of a new product for an
event about a firm, publication of official statistics such as the unemployment rate or
announcement of an increase in interest rates for an economic event, and natural
catastrophe or announcement of a major scientific discovery for an event related to the
world.

Your work:

 Choose an event and a firm

Wirecard – Accounting fraud

 Find a title for your case study : accounting fraud revelation marked the end of
wirecard

 Write a text for your analysis of the event: description of the event (about 5 lines),
description of the firm (about 5 lines), your explanation of the market reaction to the
event (5 lines max) and a justification of your choice of the event and the firm (about
5 lines).
Wire card is a German financial services company founded in 1999. In short, its business is
to guarantee online payments (smartphone, debit card or PayPal) and assure the merchant
that he will be paid. In exchange, the company collects a risk premium.

Driven by a major expansion - which would turn out to be partly fictitious - in Asia and the rise
of smartphone payments, in 2018 the company joined the DAX 30 in Frankfurt. Between
2016 and 2018, Wirecard's revenue doubles from €1 billion to €2 billion. At the beginning of
2019, the company had a market capitalization of 17 billion euros, comparable to that of
Deutsche Bank (Germany's largest bank), but with fifteen times fewer employees and less
turnover.

The meteoric rise of this company raises, over the years, more and more questions. In
January 2019, an investigation by the financial times established numerous alleged abuses
by Wirecard. Its managers in Asia had, according to the newspaper, written false contracts
and worked on financial manipulations. The group's managers deny this, but the
Singaporean police open an investigation, and the stock loses 40% in four months.

In the fall of 2019, new revelations from the FT "call into question" Wirecard's business
model. In November of the same year, the influential financial auditing firm EY refuses to
provide its certification for the 2017 accounts, further casting doubt on the company's
financial health. In mid-June 2020, everything came to a head: Wirecard repeatedly
postponed the publication of its annual results, while the German judiciary launched an
investigation against the entire management board of the fintech (financial technology)
company on suspicions of stock market price manipulation. On June 19, Markus Braun, its
chairman and founder, resigned. Three days later, the company confirms that 1.9 billion
euros mentioned in its balance sheet "most likely does not exist". On the 25th, the company,
which had lost 98% of its value on the stock market, declared itself bankrupt and filed for
bankruptcy.

I have chosen this event end the firm because it is the perfect example of how the market
react quickly on news. It is at this date, the wirecard scandal is considered the biggest
financial scandal ever to hit Germany.
  Upload a file, which illustrates the event such as a newspaper article

 Upload a file, which illustrates the market reaction (graph of the evolution of the stock
price of the firm).

Allowed file formats: png, jpg, jpeg and gif.

Note: you can always improve your case study until the end of the period.

Beyond writing your own case, you also have to evaluate the cases of other participants:

 Leave comments

 Give likes

https://www.lemonde.fr/economie/article/2020/08/31/comprendre-l-affaire-wirecard-le-
scandale-financier-qui-secoue-l-allemagne-depuis-juin_6050447_3234.html