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Wirecard AG (0O8X.L)

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2,208,699,904.00+16.57 (+0.00%)
At close: 6:07PM EDT
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  • Westfield’s Owner Is Feeding the Banks Again

    Westfield’s Owner Is Feeding the Banks Again

    (Bloomberg Opinion) -- Unibail-Rodamco-Westfield has a history of shrugging off crises. A decade ago, Europe’s No. 1 operator of top-tier shopping malls and offices doled out cash to shareholders even as banks collapsed and austerity ruled. The rise of online shopping only pushed it further to keep buying trophies like Westfield. That halo of invincibility has well and truly slipped after Covid-19.The group’s market value has shriveled to 5.1 billion euros ($6 billion) from 27 billion euros in 2018 after a global round of coronavirus-induced lockdowns robbed malls of shoppers and tenants of sales. Even now that its sites have almost all reopened, the threat of a resurgence of Covid-19 and a deeper hit to property values have pushed the company to announce a 3.5 billion-euro capital hike and a 4 billion-euro asset-sale plan.The fall from grace is astounding. Unibail trades at a whopping 80% discount to book value, which a year ago would have made the company seem like a screaming buy. Pressure from hedge funds has been immense: Short interest is an estimated 28% of free float, according to Markit, higher even than Germany’s Wirecard AG before its spectacular collapse. Speculators saw this big, dilutive share sale coming.If Unibail pulls off its deleveraging plan, the firm reckons its loan-to-value ratio can drop to 30.9% from its current level of 41.5%, well below the 60% level that would constitute a breach of debt covenants. Encouragingly, Chief Executive Officer Christophe Cuvillier said footfall is almost back to normal in continental Europe and 70% of third-quarter rents have been collected.But is that enough? Rent payments and consumer spending depend on the direction of travel of Covid-19, and the ability of governments to keep supporting the economy. The earnings outlook is exceptionally cloudy: If the second half of this year is as bad as the first, annual profits could fall 25%, according to Bloomberg Intelligence analyst Sue Munden. Mall valuations could also plunge more than the firm expects: Analysts at Barclays Plc see Unibail’s loan-to-value ratio hitting as much as 57% in 2022. Notwithstanding the possibility of a vaccine or treatment against the coronavirus, work-from-home habits are spreading, online spending is rising, and demand for commercial property is falling in major cities. Leisure businesses from movie theaters to restaurants to hotels are having to rethink their model.This is a pandemic warning that goes beyond property. The ripple effects of Covid-19 extend further than lockdowns. They’re upending companies that previously looked unassailable, and have encouraged investors to put their marginal dollars elsewhere: Online retailer THG Holdings Ltd., which listed in London this week, already has a market value higher than Unibail.After years of proving mall skeptics wrong on the mixed model of “clicks and mortar,” and transforming malls into full-on experience centers, Unibail is now scrambling to overhaul itself. If it can’t, the only people profiting will be the bankers collecting fees from the firm’s cash call — and the hedge funds, of course.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Lionel Laurent is a Bloomberg Opinion columnist covering the European Union and France. He worked previously at Reuters and Forbes.For more articles like this, please visit us at now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • SoftBank Reconsiders Trading Strategy That Hurt Shares

    SoftBank Reconsiders Trading Strategy That Hurt Shares

    (Bloomberg) -- SoftBank Group Corp. is considering revamping a controversial strategy of using derivatives to invest in tech companies, and its executives have met with investors in recent days to assure them that the bets are relatively conservative, according to people familiar with the matter.The Japanese conglomerate has stressed to investors that its billion-dollar positions have been concentrated in a handful of blue-chip tech companies, including Microsoft Corp. and Facebook Inc., and have involved call spreads rather than highly leveraged short-term bets, said the people, asking not to be identified because the matter is private.Media reports revealing details of SoftBank’s derivatives bets spooked investors, and caused the company to lose about $9 billion in market value the first day of trading after the reports.SoftBank has debated internally whether to disclose more details of its derivatives trading. But founder Masayoshi Son, who is leading the effort with support from a small team, has been reluctant to provide more information, the people said. The collapse in shares has caused Son to reconsider continuing the trading strategy, but it is not clear what changes might be made, the people said.The scrutiny from investors follows another controversial trade by SoftBank, which used complex securities to offload exposure to the now-collapsed German payments company Wirecard AG.SoftBank’s recent trading has focused on seven technology companies, one of the people said: Inc., Adobe Inc., Alphabet Inc., Netflix Inc. and Inc., in addition to Microsoft and Facebook. It typically bought out-of-the-money call options to benefit if share prices rise and then sold even higher priced calls, one of the people said.A spokesperson for SoftBank declined to comment.The Tokyo-based company said in August that it would set up a new arm to trade public securities and later disclosed investments of about $3.9 billion in 25 companies. Bloomberg first reported that SoftBank was targeting investments of more than $10 billion in public stocks as part of a new asset management arm.U.S. stock benchmarks declined after Bloomberg reported the SoftBank deliberations. The Nasdaq 100 tumbled more than 1%, hitting its session low as losses grew in megacap technology companies including Apple Inc. and Inc.“It’s just one piece of the puzzle, but the market did seem to sell off around the same time,” said Chris Murphy, Susquehanna International Group’s co-head of derivatives strategy. “Is it necessarily rational, for however much market cap of companies to go lower because of a decision made by one institutional trader? Probably not. But is the market looking for reasons to selloff in one direction or another? Probably. This is the most talked about thing, so it’s definitely on everyone’s minds.”Options volume in single securities has rocketed to near-record levels in recent weeks. Benn Eifert, chief investment officer of hedge fund QVR Advisors, said that very large call purchases made in tech stocks over the last few months appear to have been defensive trades rather than all-in bets on further gains.Although he didn’t know SoftBank was behind the purchases until the recent disclosures, Eifert said the series of transactions look like each other and seem related. They have been primarily in call spreads and some calls with expiration dates between November 2020 and March 2021 in six or seven of the biggest names in technology.“Most of the big trades that are associated with SoftBank, or accounts like SoftBank, were done delta-neutral,” he said. “These are institutions that are already long tech stocks and are rotating some of that exposure into options to protect the downside.”Eifert estimated that the notional value of all the trading flow to be more than $50 billion with a few billion dollars spent on the premiums, or option cost. The purchases had far less impact on the bullish feedback loop driving tech stocks higher than did hordes of retail traders buying short-dated call options, he said.Read more: How Tech Options Juiced the U.S. Stock Market: QuickTake(Updated with additional context from 10th paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • The Law Offices of Frank R. Cruz Reminds Investors of Looming Deadline in the Class Action Lawsuit Against Wirecard AG (WCAGY, WRCDF)
    Business Wire

    The Law Offices of Frank R. Cruz Reminds Investors of Looming Deadline in the Class Action Lawsuit Against Wirecard AG (WCAGY, WRCDF)

    The Law Offices of Frank R. Cruz reminds investors of the upcoming September 8, 2020 deadline to file a lead plaintiff motion in the class action filed on behalf of investors who purchased Wirecard AG ("Wirecard," the "Group," or the "Company") (OTC: WCAGY, WRCDF) securities between August 17, 2015 and June 24, 2020, inclusive (the "Class Period").