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Wirecard: TPA Infographic

  • SHORT @ €--

Recommendation: Short (No Change)

Price:

€--

3m ADV:

$250m

Valuation Metric:

Price/Adjusted FCF

Price Target:

€--

Market Cap:

€10.4bn

Current Multiple:

>40x

Forecast Return:

~65%

Ticker:

WDI GY

Target Multiple:

15x

With additional clarity emerging in 2020 from Wirecard and the KPMG special audit, we are in a clearer position to understand the opaque and risky business model. We have presented our simplified summary in this infographic. This also illustrates the challenges for a forensic auditor to verify certain balances and customers of third-parties. Of course, if these third-parties are actually ‘related’ to Wirecard, additional risk is introduced in the money flows.

Clients can use this infographic as a tool to understand the model and potential risks to shareholders of roundtripping, accounting irregularities, money laundering controls, cash balances, and corporate governance. We particularly highlight the recent closure of four elements in this chain (Wirecard’s Middle-East subsidiary CardSystems, the main TPA partner Al Alam, and the former Trustee and Escrow entities mentioned by KPMG).

 

 

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Authorised and regulated in the United Kingdom by the Financial Conduct Authority (registration number 972969). Registered as an investment adviser in the United States of America by the U.S. Securities and Exchange Commission (registration number 801-76777).

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