Wirecard out of the DAX, Delivery Hero in?
After recent developments surrounding Wirecard and its bankruptcy, the German stock exchange, Deutsche Boerse, had to change some of its rules in regards to removing insolvent companies from the German DAX.
From August, 21st, insolvent companies can be removed from the DAX with two trading days' notice, adding that this rule change would apply to Wirecard, "given the current situation" after the company collapsed into insolvency in June, admitting 1.9 billion euros went missing from its balance sheet.
Have not made any money since 2011 - is Delivery Hero a worthy Wirecard successor?
While Deutsche Boerse will not officially decide which company will replace Wirecard in the DAX until August 21st , signs intensified in recent days that the Berlin-based food supplier DeliveryHero (#DHER) has the best prospects to follow Wirecard and join the DAX.
What is certainly interesting here is that DeliveryHero is not doing any business in Germany after it sold its German business to Dutch competitor Just Eat Takeaway ("Lieferando") in 2019 for around 1 billion Euro.
The company then invested the money in the Middle East and North Africa, mainly driven by the fact that in 2019 nearly half of total sales (~ 1.2 billion euros) came from these regions.
While it remains to be seen whether this move plays out in the long run, it remains a fact that DeliveryHero has not made any money since it was founded in 2011, but still has a market value of around 20 billion Euros.
When looking closely at DeliveryHero, the story of the company reflects that of Wirecard's with the DeliveryHero stock currently seeing a significant run higher since it announced that it expects revenues of 2.6 and 2.8 billion euros in 2020 due to the Corona-crisis. In fact, this outlook is positive and nearly twice as high as it was in 2019.
From its March lows around 50 Euros, the stock has nearly doubled, currently trading above 100 Euros. With rising attention among market participants with a promotion into the DAX, the recent trend could certainly continue.
Still, we remain cautious: if Equity markets around the globe are hit by another wave of risk off due to rising speculation of a second lockdown or, ultimately, the implementation of one, shares could tumble more aggressively than the broader market.
How to trade #DHER in this environment?
Technically, as long as #DHER trades above 89.00 Euro and its SMA(200), the stock will remain bullish and has further upside potential.
But, a significant drop back below 100 Euro and a break below 89.00 would send a clear warning message to bulls. It could probably be seen as a sign of bears stepping in and targeting a deeper corrective move to as low as 80 Euros:
Source: Admiral Markets MT5 with MT5SE Add-on #FB chart (between March 25, 2019 to August 19, 2020). Accessed: August 19, 2020 at 2:00 PM GMT - Please note: Past performance is not a reliable indicator of future results, or future performance.
In 2017, the value of #DHER increased by 16.8%. In 2018, it decreased by 1.5%, and in 2019, it rose 117.1%, meaning that after 2.5 years, it was up by 149.7%.
Discover the world's #1 multi-asset platform
Admiral Markets offers professional traders the ability to trade with a custom, upgraded version of MetaTrader 5, allowing you to experience trading at a significantly higher, more rewarding level. Experience benefits such as the addition of the Market Heat Map, so you can compare various currency pairs to see which ones might be lucrative investments, access real-time trading data, and so much more. Click the banner below to start your FREE download of MT5 Supreme Edition!
Disclaimer: The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter "Analysis") published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:
- This is a marketing communication. The analysis is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
- Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.
- Each of the Analysis is prepared by an independent analyst (Jens Klatt, Professional Trader and Analyst, hereinafter "Author") based on the Author's personal estimations.
- To ensure that the interests of the clients would be protected and objectivity of the Analysis would not be damaged Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
- Whilst every reasonable effort is taken to ensure that all sources of the Analysis are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. The presented figures that refer to any past performance is not a reliable indicator of future results.
- The contents of the Analysis should not be construed as an express or implied promise, guarantee or implication by Admiral Markets that the client shall profit from the strategies therein or that losses in connection therewith may or shall be limited.
- Any kind of previous or modelled performance of financial instruments indicated within the Publication should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
- The projections included in the Analysis may be subject to additional fees, taxes or other charges, depending on the subject of the Publication. The price list applicable to the services provided by Admiral Markets is publicly available from the website of Admiral Markets.
Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, you should make sure that you understand all the risks.