After the final end of Wirecard and the unprecedented collapse of a large German company, the Wirecard share became practically worthless. From over 100 € to 0.33 cents, Wirecard fell last year. Since then, it has been languishing in the range of 40c - 50c, apart from a brief squeeze at the beginning of the year.
Nevertheless, the short interest, i.e. the proportion of short-sold shares, is still high. Although these shares are hardly worth anything, given the minimal trading volume, it would still be very difficult to get rid of them quickly. And with rising prices, the holders of the shorts would have to get rid of the shares very quickly. How fast and violent the price reaction can be, we were able to see around January 6th. Wirecard shot up over 500% within 2 days at that time.
Now the sideways/downward movement has been broken with a dynamic candle. The shorts will quickly come under pressure here and trigger a hard squeeze that can carry back to the 6 - 8 € region. A potential of 1500%. The chances are not extremely high that this scenario will occur, but the risk-reward ratio more than makes up for this disadvantage.
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Lars Wißler owns shares of Wirecard. PWP Leeway does not own any of the mentioned shares.
