Wirecard – The “German Enron”, and a personal history
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Wirecard – The “German Enron”, and a personal history
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Re: Wirecard – The “German Enron”, and a personal history
#2> Lessons to be learned
* even a pretty obvious fraud can go on much longer than one would think if the organizers are ruthless enough. My original short position would have gone against me 25x over 12 years and the share price even after today’s disaster would be higher than back in 2008 (just to be clear: the company is worth ZERO in my opinion)
* a company that goes against people who write negative articles as aggressively as Wirecard has something to hide
* if the profitability of a business can not be explained by its business model, then most likely something is very wrong (greetings Bernie Madoff)
* 99% of professional investors and analysts don’t care about these things even if you tell them. A lot of people knew that the company was fishy but hey thought they can make money anyway and a lot of people made a lot of money over the years
* Small companies with far flung operations in difficult geographies should be avoided (see Globo Plc) as this makes fraud difficult to detect for auditors
* A big 4 Audit firm is no proof of quality.
Re: Wirecard – The “German Enron”, and a personal history
#3> Lessons to be learned * even a pretty obvious fraud can go on much longer than one would think if the organizers are ruthless enough. My original short position would have gone against me 25x over 12 years and the share price even after today’s disaster would be higher than back in 2008 (just to be clear: the company is worth ZERO in my opinion) * a company that goes against people who write negative articles as ag…
The first one really is key here. Exhibit A is "stablecoin" Tether, which has more red flags than a Kremlin May Day parade and steadfastly refuses to get audited, but has nevertheless been puttering away for several years now. When will the penny drop?
Re: Wirecard – The “German Enron”, and a personal history
#4It's easy to miss that the article is published under the same username as the one described as an "anonymous source", in, for example "... Wirecard desperately wanted to know who this memyselfandi007 was to sue the shxx out of him, but the police didn’t pass on the real identity."
Re: Wirecard – The “German Enron”, and a personal history
#5> Lessons to be learned * even a pretty obvious fraud can go on much longer than one would think if the organizers are ruthless enough. My original short position would have gone against me 25x over 12 years and the share price even after today’s disaster would be higher than back in 2008 (just to be clear: the company is worth ZERO in my opinion) * a company that goes against people who write negative articles as ag…
The first one really is key here. Exhibit A is "stablecoin" Tether, which has more red flags than a Kremlin May Day parade and steadfastly refuses to get audited, but has nevertheless been puttering away for several years now. When will the penny drop? https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/
How do you avoid getting audited for several years ?
Re: Wirecard – The “German Enron”, and a personal history
#6Earlier quoted context omitted.
The first one really is key here. Exhibit A is "stablecoin" Tether, which has more red flags than a Kremlin May Day parade and steadfastly refuses to get audited, but has nevertheless been puttering away for several years now. When will the penny drop? https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/
How do you avoid getting audited for several years ?
As a cryptocurrency? You just decide not to get audited.
Re: Wirecard – The “German Enron”, and a personal history
#7> Lessons to be learned * even a pretty obvious fraud can go on much longer than one would think if the organizers are ruthless enough. My original short position would have gone against me 25x over 12 years and the share price even after today’s disaster would be higher than back in 2008 (just to be clear: the company is worth ZERO in my opinion) * a company that goes against people who write negative articles as ag…
The first one really is key here. Exhibit A is "stablecoin" Tether, which has more red flags than a Kremlin May Day parade and steadfastly refuses to get audited, but has nevertheless been puttering away for several years now. When will the penny drop? https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/
From my experience a fraud is easy to spot with a keen eye. But persuading the public that hot company is a fraud - different matter.
Re: Wirecard – The “German Enron”, and a personal history
#8Earlier quoted context omitted.
The first one really is key here. Exhibit A is "stablecoin" Tether, which has more red flags than a Kremlin May Day parade and steadfastly refuses to get audited, but has nevertheless been puttering away for several years now. When will the penny drop? https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/
How do you avoid getting audited for several years ?
I'm no expert, but I think what happens is you shop around for an auditor but you somehow can never find one who will sign off on the audit, because they need you to produce some docs that you don't have.
Re: Wirecard – The “German Enron”, and a personal history
#9> In 2019, the boss of the supervisory board hired KPMG mainly to independently confirm that everything is splendid at Wirecard (E&Y is the auditor of Wirecard).
So, will anything happen to E&Y, or do they just get to say "we didn't know that was fraudulent, we just did what we got paid to do"?
Re: Wirecard – The “German Enron”, and a personal history
#10> Lessons to be learned * even a pretty obvious fraud can go on much longer than one would think if the organizers are ruthless enough. My original short position would have gone against me 25x over 12 years and the share price even after today’s disaster would be higher than back in 2008 (just to be clear: the company is worth ZERO in my opinion) * a company that goes against people who write negative articles as ag…
I wrote this here a few days ago:
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Wirecard has been accused before of fraud by so called "short sellers". The document published (2 years ago?) showed a tremendous, extraordinary complex network of international corporations. Such complex setups have a very limited purpose. It can basically be only tax "optimization", hide fraud or hide ownership (UBO). After having seen this PDF I would not touch the Wirecard stock.
By the way, I think Alibaba is opening two new corporations. Per day. You may also want to read at Bronte Capital about Alibaba.
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"the company is worth ZERO in my opinion)"
This IS a possibility. But the stockmarket exaggerates always in both directions, "like a sausage dog on a leash, sometimes walks in front of you, sometimes behind you but always comes back to you" Kostalany
If you want to make a gamble there could be buying prices now or soon. But it stays a gamble.
"Even a good company can be too expensive" Buffet
"Even a shitty company can be cheap" me