Wirecard shares jumped as much as 160% on Tuesday as it continues to rebound from lows seen last week.
The fintech group’s stock jump was likely propelled by UK’s financial authority lifting restrictions on one of its subsidiaries.
Thousands of customers were unable to access their cash after the German parent company filed for insolvency and the UK immediately ordered a halt to all of its British operations.
The company’s share price is down around 95% in 2020 as a result of its multi-billion dollar accounting scandal.
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Wirecard shares soared as much as 160% on Tuesday after the UK’s financial watchdog greenlit operations for one of its key businesses operating in the country.
Wirecard’s share price hit €9.30 at one point during European morning trade, a gain of some 160%, before sliding off these highs. By 9.55 a.m. ET, the stock was trading at €4.90, a gain of around 40% on the day.
However, the fintech group’s stock is still down about 95% in 2020, having traded as high as 140 euros per share as recently as April, and at over 100 euros in mid-June.
Tuesday’s move is likely helped by an announcement from the UK’s Financial Conduct Authority that Wirecard’s UK subsidiary can restart business.
In a statement, the FCA said its objective is “to protect the interests and money of consumers who use Wirecard.”
The subsidiary, Wirecard Card Solution Limited, is now authorized to continue its regulated activities by resuming e-money issuance and providing payment services.
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After the company filed for insolvency last week, the FCA immediately ordered a halt to all operations run by Wirecard’s UK subsidiary.
Thousands of customers subsequently had no access to money on their cash cards, thereby unable to make any payments.
Wirecard’s accounting misconduct was called into question by a high-profile reporting series conducted by the Financial Times beginning in 2015.
The FT’s latest review of Wirecard’s clients in 2017 showed that the company relied only on about 100 customers contributing to majority of its sales.
Here’s how Wirecard went from analyst darling to a $2.2 billion accounting scandal – and cost SoftBank hundreds of millions in the process
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Source:: Business Insider