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Wirecard files for insolvency after financial hole laid bare

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Re: Wirecard files for insolvency after financial hole laid bare

#151

Post by lowmemcpu »

ricardo81 wrote: post #66
the_mitsuhiko wrote: post #62

Earlier quoted context omitted.

That’s irrelevant. They have customers with complex integrations who can’t move. That’s worth a lot of money. Someone will want to acquire that.

I'd tend to believe your take on it. Pulling the rug from all the companies using Wirecard to process payments could cause mayhem. Though when it comes to a buyer, hard to tell how they'll be able to get to a fair valuation given the fairytale numbers they have in their books.

> Though when it comes to a buyer, hard to tell how they'll be able to get to a fair valuation given the fairytale numbers they have in their books.

I always pictured the court auctioning off assets in a firesale to the highest bidder. Is that not how it works?

Re: Wirecard files for insolvency after financial hole laid bare

#152

Post by stochastastic »

codegladiator wrote: post #111
raesene9 wrote: post #89

Earlier quoted context omitted.

The EY point is interesting. I'm not sure if it's still this way, but when I worked there, a lot of care was put on audit clients as the partner(s) signing off the work had effectively unlimited liability, and could lose pretty much all their money in a worst case scenario. Unfortunately audit work, where the company decides on their auditor, has an in-built conflict of interests. If the auditor is too harsh/rigorous…

> If the auditor is too harsh/rigorous, then they risk losing the audit How is this a thing ?

In my experience with auditors, harsh/rigorous does not necessarily mean better because the auditor’s mindset makes an enormous difference. I’ve had process-focused people spend days of their time and mine digging into things that do not have a material impact on results. Unfortunately, even if people have the best intentions, I think that process-focused-but-loose and results-focused-but-rigorous can be easy to mix up, especially for people not in the weeds.

Re: Wirecard files for insolvency after financial hole laid bare

#153

Post by trias »

sp332 wrote: post #92
simonkafan wrote: post #83

I wonder how many companies in the world are basially built on warm words without any real value behind. I made the experience that a lot of people don't really care if a company has positive revenue streams anymore, they don't even know what a balance sheet is. They simply invest because other people do. And those other people invested because people before them did. This new style "invest billions now in a lossy st…

I'm wondering why the CEO called in KPMG for an independent audit. Was he expecting a different result? Or he just picked them to break the news?

At some point you start believing your own lies so he probably thought everything would be fine and the markets would be calmed with another auditor confirming the results.

Re: Wirecard files for insolvency after financial hole laid bare

#154

Post by bflesch »

chosenbreed37 wrote: post #105
raesene9 wrote: post #89

Earlier quoted context omitted.

The EY point is interesting. I'm not sure if it's still this way, but when I worked there, a lot of care was put on audit clients as the partner(s) signing off the work had effectively unlimited liability, and could lose pretty much all their money in a worst case scenario. Unfortunately audit work, where the company decides on their auditor, has an in-built conflict of interests. If the auditor is too harsh/rigorous…

> The EY point is interesting. I'm not sure if it's still this way, but when I worked there, a lot of care was put on audit clients as the partner(s) signing off the work had effectively unlimited liability, and could lose pretty much all their money in a worst case scenario. Does it ever pan out the way? I'm speaking of the liability on the partners. There have been a number of these in recent times involve pretty m…

Arthur Andersen was a large accounting firm which went bankrupt after their client Enron went belly up. https://en.wikipedia.org/wiki/Arthur_Andersen

Re: Wirecard files for insolvency after financial hole laid bare

#155

Post by dang »

Here's the rest of the stack so far:

https://news.ycombinator.com/item?id=23611347

https://news.ycombinator.com/item?id=23573386

https://news.ycombinator.com/item?id=23598824

https://news.ycombinator.com/item?id=23438323

This, from a year ago, reads interestingly now: https://news.ycombinator.com/item?id=19737344

Re: Wirecard files for insolvency after financial hole laid bare

#156

Post by ricardo81 »

lowmemcpu wrote: post #151
ricardo81 wrote: post #66

Earlier quoted context omitted.

I'd tend to believe your take on it. Pulling the rug from all the companies using Wirecard to process payments could cause mayhem. Though when it comes to a buyer, hard to tell how they'll be able to get to a fair valuation given the fairytale numbers they have in their books.

> Though when it comes to a buyer, hard to tell how they'll be able to get to a fair valuation given the fairytale numbers they have in their books. I always pictured the court auctioning off assets in a firesale to the highest bidder. Is that not how it works?

I am not sure, I suppose an administrator may want to tear the guts out of the business and try sell off the parts of value.

Was just thinking of the people that rely on Wirecard for transactions at the moment, switching them off doesn't seem sensible for any outcome.

Re: Wirecard files for insolvency after financial hole laid bare

#157

Post by CyberDildonics »

celticninja wrote: post #125
simonkafan wrote: post #83

I wonder how many companies in the world are basially built on warm words without any real value behind. I made the experience that a lot of people don't really care if a company has positive revenue streams anymore, they don't even know what a balance sheet is. They simply invest because other people do. And those other people invested because people before them did. This new style "invest billions now in a lossy st…

I have a relative in finance and he says this sort of issue is a lot more prevalent, it's just easier to hide when things are good. When times are bad it's more difficult so more get found out. But it's important to remember that people have been sounding the alarm about Wirecard for years and Worecard, the German government and German Finance Authority (BaFin) have gone after the short sellers and journalists who ha…

Warren Buffet would say that when the tide goes out you see who is swimming naked.

Re: Wirecard files for insolvency after financial hole laid bare

#158

Post by corty »

sp332 wrote: post #92
simonkafan wrote: post #83

I wonder how many companies in the world are basially built on warm words without any real value behind. I made the experience that a lot of people don't really care if a company has positive revenue streams anymore, they don't even know what a balance sheet is. They simply invest because other people do. And those other people invested because people before them did. This new style "invest billions now in a lossy st…

I'm wondering why the CEO called in KPMG for an independent audit. Was he expecting a different result? Or he just picked them to break the news?

KPMG in german stands for Keiner Prueft Mehr Genau: nobody checks thoroughly anymore. I guess he just thought they would provide the desired result...

Re: Wirecard files for insolvency after financial hole laid bare

#159

Post by oh_sigh »

jdblair wrote: post #43

Invisibilia just released a great podcast about trust, based on the experience of a trader who was harassed by Wirecard. The trader, who was shorting Wirecard, was subject to surveillance, and a constant stream of phishing attacks. https://www.npr.org/2020/06/02/868001948/trust-fall

How would wirecard learn who is actually shorting them?
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