Too opaque to trust or next time everything is different? A case study on the impact of Wirecard’s crash on German TecDAX companies and other payment service providers

We explore whether Wirecard’s presumed balance sheet manipulations have generated negative contagion effects. On the one hand, we focus on contagion to other tech companies, included in the German TecDAX index, and on the other hand, on contagion to other payment service providers. For the first group of companies, negative contagion effects could result from the opaqueness of innovative technologies, and for the second group of firms, this could result from decreasing market confidence in a business model that is potentially similar to the one of Wirecard. However, based on a descriptive analysis of equity share prices and a rolling window correlation analysis of stock returns, we do not find any evidence for negative contagion effects originating from Wirecard, neither to other TecDAX companies nor to payment service providers. Zooming into the effects on those TecDAX companies or payment service providers that were audited, as Wirecard, by EY we do not find any negative contagion effects, either.