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Jun 15 • 12 tweets • 3 min read
The #cryptocrash reminds me a little bit of the day Wirecard announced €1.9bn of its money was "missing".
(June 18, 2020, two years ago this week)
🧵
All the investors, long and short, knew a day of reckoning was coming. Publishing audited results could be put off no more. The big unknown was if EY would be duped, again, and sign the accounts for the tenth year in a row.
If EY signed, Wirecard was going to the moon 🚀🚀🚀

If it didn't, game over. 🤮🤮🤮
@OlafStorbeck and I were both on tenterhooks for the news. We hadn't written a thing in advance, not wanting to temp fate.
The stock market opens, nothing. The price starts to drop, then the bombshell lands.
ft.com/content/1e753e…
Game over, right? Wirecard had a lot of debt and been caught in a fraud, it was a one-way ticket to zero.

Some of the short sellers had been waiting for this moment for many, many years.

And yet...
The stock plunged from €105 down to €30 a share, but then recovered to end the day at €40. People were buying.

Some of the believers still had hope. Wirecard's market capitalisation at the end of the day was €5bn. Its debt traded at 40 cents on the dollar.
Were investors waiting for arrests to capitulate?
They're still waiting for one of them - this guy peering over my shoulder skipped off to Moscow before warrants were issued THREE DAYS later.
Short sellers sold every share they could get their hands on. For some it was what finally made their long campaign profitable
ft.com/content/ecc4f1…
All the information was there, the issues and dangers were well known, but it still took days time for everyone to take it in and react.

Wirecard was insolvent, it had been for a long time, but it had kept the plates spinning for years and very nearly got away with it.
How, and why did Wirecard do all of that? Well, therein lies a tale. It's a personal one, an adventure that drove lots of people a little a bit mad, me included, and it involves the theft of billions. It's published tomorrow:
penguin.co.uk/books/144/1444…
And if you'd like to win a signed copy, RT this one:

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More from @FD

Dan McCrum Profile picture
Jun 15
It’s a sunny afternoon, who wants to talk about people who have inspired you through the example they set?

I’ll go first, let me tell you a little about David McCrum, my dad.

🧵
Dave, as he's known to his friends, sold cars to embassies for Ford. He has some terrific stories about befriending diplomats with blinding amounts of gin, but that's not the example I'm thinking of, I wasn't around yet.
He got headhunted to British Leyland, ended up with a top job at the tractor unit, and soon realised it was doomed. He was waiting till after a holiday using the company car to quit, when they sat him down and handed over a big redundancy check. Image
Read 14 tweets
Dan McCrum Profile picture
Jun 13
🚨Competition time 🚨
To mark publication of MONEY MEN, the stranger than fiction thriller about Wirecard's multi-billion dollar fraud, I have 2 proof copies to give away.
To enter: predict the $ price of Tether at 10pm BST today. $0.9977 now
Closest wins one.
Reply to win!
Thank you for playing. The 10pm Tether price hit 0.9986.

Well done @Edmund_Schuster @RabbiJacob16 @benyeohben @beingianbergin @Postbote1970 @preiselbernd @BenFoldy @BenFoldy @Simon_Craven

If you could all bring a knife to the Strand Underpass, we'll proceed to sudden death*
*A more appropriate venue for picking the winner from a hat may be decided in the a.m.
Read 5 tweets
Dan McCrum Profile picture
Jun 18, 2020
For background on Wirecard collapse today, these are the two key stories.
In October, we wrote that sales and profits appeared fraudulently inflated.
ft.com/content/19c6be…
In December, we wrote that "trustee accounts" were included in cash balances.
ft.com/content/845b0d…
The rise and fall of Wirecard
with the indefatigable @OlafStorbeck
ft.com/content/149cd2…
The Wirecard fraud centres on faked documents.
Where did we start last year?
Whistleblower allegations of forged invoices and bogus contracts at its Asian headquarters

ft.com/content/d51a01… Image
Read 37 tweets
Dan McCrum Profile picture
Dec 19, 2019
New Wirecard story today poses what should be a simple question to answer: why did the German company agree to pay around €300m for an Indian business only weeks after it changed hands for €37m? (Free to read) 1/6 ft.com/content/b36723…
It explains why Wirecard’s largest takeover has raised questions of fraud, not least because the two key Indian businesses it purchased are under investigation by the Singapore authorities in connection to suspected forged documents and fake sales.
2/6
Wirecard has denied impropriety and “round tripping”, where a third party helps a company to inflate sales.

What Wirecard has not done is identify the people whose opaque fund, EMIF 1A, appears to have made €250m+ profit as a middle-man in its €340m deal. 3/6
Read 9 tweets
Dan McCrum Profile picture
Mar 29, 2019
The latest FT investigation into Wirecard features some brilliant on the ground reporting from @stef_palma, who visited its listed partners in Manila, found a bus company, empty warehouse, lot of confused people. ft.com/content/cd1239…
Those partners shine a light on the business Wirecard refers to internally as "third party referring", expected to contribute half of sales in 2018. A quarter of revenues were forecast to come from "acquiring", according to information from whistleblowers.
Long time readers will also notice today's piece brings us all the way back to some of the topics covered in the first two pieces in the House of Wirecard series, published in 2015.
Read 9 tweets

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