The Evil Diaries: Wirecard and Avanti

Yesterday evening I hosted a cabal of short-sellers who discussed, inter alia, matters at Wirecard (WDI on Frankfurt). There is no doubt that this remains a massive fraud and that the eventual price will be zero, down from the current E34. But one contributor remarked that WDI might come up with surprise good news/enhanced, because fraudulently enhanced, results and that therefore it might be wiser to close one’s short pro tem. Certainly there is a 25% short position and borrow is now almost impossible and that therefore the price could be pretty frisky. But I think one should hold the short and try not to be too fancy.

One thing stands out: just what are Ernst and Young doing remaining in office? Surely, one of the auditors’ requirements is to check whether their audit client’s business is lawfully conducted. WDI’s is not. It was a small branch of Arthur Andersen that handled Enron: this destroyed the worldwide firm. (Some will claim that these illegal transactins on the part of WDI are completed to the satisfaction of buyers and sellers who are directly involved and therefore do not give rise to future fears. But the fact is that they are unlawful and have now attracted the FBI.)

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The Avanti (AVN) expert was on hand and he confirmed that this stock is also going to zero. The problem is that borrowing stock is next to impossible.

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Finally, top class journalism: the Daily Telegraph deployed its most suitable hack to report on the footballers who, bursting to relieve themselves when in the front row of the balcony adjoining their box at Cheltenham, elected to urinate in public. His name is Tom Peacock.