
SoftBank to invest over $1B in German payment company Wirecard - PaulMartin123
https://world-news-monitor.com/top-news/2019/04/24/softbank-to-invest-over-1-bln-usd-in-german-payment-company-wirecard/
======
pavlov
Ah, Wirecard, the company that's trying to get two Financial Times journalists
prosecuted for exposing their fraudulent accounting:

[https://aboutus.ft.com/en-gb/announcements/ft-statement-
on-w...](https://aboutus.ft.com/en-gb/announcements/ft-statement-on-wirecard-
reporting/)

~~~
wolfi1
According to this article [https://www.faz.net/aktuell/finanzen/bafin-
verdaechtigt-ft-j...](https://www.faz.net/aktuell/finanzen/bafin-verdaechtigt-
ft-journalisten-im-fall-wirecard-16144310.html) there is an investigation in
insider trading related to the Ft-article series (naked short selling
allegedly rose before the publication of the articles)

~~~
OldManAndTheCpp
Wait, naked short selling is unrelated to insider trading.

Insider trading is illegally profiting on information that was given to you in
trust, while naked short selling is short selling without a documented ability
to deliver the stock.

As far as I can gather from english language articles, the regulator has
banned short selling in response to an article alleging fraud at wirecard.
Bloomberg describes this as "unprecedented".

[https://www.bloomberg.com/news/articles/2019-02-18/bafin-
ban...](https://www.bloomberg.com/news/articles/2019-02-18/bafin-bans-new-
wirecard-net-short-positions-and-increases)

~~~
olivermarks
today's FT front page headline 'Wirecard relied on three opaque partners for
almost all its profit' 'Dubai-based unit of German payments group was not
audited'

'Al Alam Solutions, a Dubai-based payments processor with skeletal operations
in the Emirate, is the largest of the three “partner” entities. Wirecard
refers clients to Al Alam in return for a share of any processing fees as
commission. A former Al Alam employee said the business had six or seven staff
in total and “the boss” was Oliver Bellenhaus, a Wirecard executive. The other
partners are PayEasy Solutions, a Philippine payments group that shares an
office with a Manila bus company, and Singapore-based Senjo. '

[https://www.ft.com/content/a7b43142-6675-11e9-9adc-98bf1d35a...](https://www.ft.com/content/a7b43142-6675-11e9-9adc-98bf1d35a056)

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phyalow
I have a feeling SoftBank in 10 years time will firmly be placed in the annals
of history as being the very definition of dumb money.

~~~
Traster
Between the breadth of their investments and the favorable terms they can get
due to their size and positioning it seems very unlikely they'll significantly
under perform the market in the long term. Quite literally, they're so
diversified it seems very unlikely that they can completely burn the money.

It seems unlikely for them to outperform, but I don't think it's likely that
they'll be notably underperforming.

~~~
hodder
Define "the market". They are diversified across the "new tech" sphere, which
on average produces mostly losers and a few big winners.

Diversified tech funds or VC funds as a category, which mostly ignore the
large cap and mega cap sphere, have historically underperformed the market
except for a group of elite VCs.

What this means for Softbank remains to be seen, but the very act of dumping
this much money indiscriminately into new tech cos may have juiced valuations
to the point of hindering future returns on the basket.

------
fabiandesimone
I recently tried to integrate to Wirecard for one of my projects and it was a
nightmare. Documentation sucked and once we spent 7 days connecting they told
us that the API was being deprecated and we have to migrate to a new one which
turn out to be 30 days of more integration. Fun time.

~~~
paganel
We had a similar experience with Vantiv, whose parent company (Worldpay) was
recently bought with about $50 billion. I just can't understand how business
works sometimes.

~~~
tgraham
Out of interest, did you guys give up, plod on or pick someone else?! If so,
who?

~~~
paganel
We somehow managed to make it work, can’t exactly remember the details but I
think at some point it involved us sending them desperate emails (or maybe
phone calls, can’t remember exactly) asking them to please change some
settings on their side of things so that we would be able to test as close as
possible to “live”, it took them at least two or three days if not more to
make the change, which created unwanted dead time for us.

To say nothing of the fact that at some point we spent at least two days
practically hitting a wall over and over again: we were sending the requests
exactly as their not-so-great docs were telling us to do but the response was
totally different from what we were expecting. In desperation we somehow
managed to contact them (meaning my boss sitting on a phone call with them) to
realize that the dev instance they had provided us with still needed some
small change on their side of things. Totally non-transparent framework and it
all seemed as fickle as a castle made out of sand.

For comparison we had the best experience implementing Stripe, it was like
night and day compared to Vantiv. Unfortunately at the end of the day you need
to implement what the stakeholders want.

------
matt4077
The linked source seems to be down. And, judging by this and its URL, it would
seem to be a rather sketchy outfit, anyway.

Bloomberg on this:
[https://www.bloomberg.com/news/articles/2019-04-23/softbank-...](https://www.bloomberg.com/news/articles/2019-04-23/softbank-
is-said-to-consider-acquiring-5-stake-in-wirecard)

Note that this does not seem to be one of Softbank’s _Myopic Vision Fund_
investments, but rather a standard strategic investment including an actual
working relationship going forward.

------
mtw
I think SoftBank has too much money either don't know how to do with it, or
don't know how to do money management.

~~~
swarnie_
I think its a sign of the late economic cycle, nothing is cheap and titans
have already been established in the last 11 years.

I'd be inclined to hold my money and see what shakes out of the next
inevitable market shake up. But then i'm not running softbank for good
reasons....

~~~
charlesdm
It likely is, but I do wonder how much QE has played into permanently raising
the prices of assets.

I won't make that bet, but it could very well be years before something major
happens.

~~~
rapsey
So many companies doing IPOs lately, seems to me we are reaching a top.
Private money running out, lets go for public.

~~~
charlesdm
For tech, yes. But does that mean the whole economy or tech sector goes into a
recession? I.e. will the fact that Uber tanks after IPO have an effect on
Apple?

~~~
rapsey
2008 was a housing bubble and it cut everyone at the knees.

~~~
T-A
Housing is a huge component of the US economy. Total value in 2018: $33.3
trillion [1], 1.6x GDP (20.9 trillion) [2].

Tech is about 5% of GDP [3].

[1] [https://www.housingwire.com/articles/47847-us-housing-
market...](https://www.housingwire.com/articles/47847-us-housing-market-value-
climbs-to-333-trillion-in-2018)

[2] [https://www.thebalance.com/u-s-gdp-5-latest-statistics-
and-h...](https://www.thebalance.com/u-s-gdp-5-latest-statistics-and-how-to-
use-them-3306041)

[3] [http://www.ianhathaway.org/blog/2017/5/31/how-big-is-the-
tec...](http://www.ianhathaway.org/blog/2017/5/31/how-big-is-the-tech-sector)

~~~
opportune
You're comparing the total value of all housing to GDP vs. an actual percent
of GDP. That's not an apples to apples comparison.

A quick lookup tells me construction is about 4% of GDP. And
financing/ancillary services for that construction, if I had to estimate,
might make up another 2% at most. Which is pretty close to tech

~~~
T-A
Yes, but what happened in 2008, and caused the crisis referred to by rapsey,
was that housing lost a large fraction of its _value_. It was not a drop in
construction, financing etc that tanked the economy; it was the loss of value,
which left a giant hole in balance sheets.

The apples-to-oranges comparison was introduced by rapsey, I merely provided
the numbers.

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jamisteven
Seriously need to launch already so I can hitup softbank for some green.

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Fnoord
Wirecard? Together with 3V they released pay2d as debit card here in The
Netherlands, after which 3V was discontinued. Unfortunately they added
ridiculous fees (which their competitor Neteller doesn't have). So I went with
them instead.

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m3nu
In other news: SoftBank Founder Masayoshi Son Lost $130 Million on Bitcoin

~~~
goobynight
A whole half percent of his net worth.

Some people lose more, relatively, by getting a cat/dog.

