Techleader without Technology - Quant IP
In September 2018, Wirecard ousted Commerzbank from the DAX. A Fintech company displaces a traditional bank. This fitted into the success story of the self-appointed technology group from Aschheim near Munich. Finally, a tech company from Germany that made the breakthrough. Some headlines saw Wirecard on a par with SAP.
Wirecard itself wrote in its Annual Report 2018: “As a global leader for innovation in the payment industry and a supplier of solutions for electronic payment transactions, the growth of the global digital payment market is crucially important to the Wirecard Group”. The word innovation appeared in the annual report a total of 18 times. But the entire technology, the entire IP of the company with a market capitalization of around 25 billion euros was protected by just one single patent.
Just how far Wirecard was from being a genuine technology group is also made clear by a look at the Quant IP Innovation Score, which, despite all the hype, only fluctuated around 25 points (maximum value 100):
Should one have already suspected a case of fraud based on the patent weakness and the low innovation score? Certainly not. But the big gap between the company’s own presentation of itself as a global technology group and the innovation key figures fits into Wirecard’s picture: Almost nothing was as it seemed. In any case, the Wirecard share has never been an issue for our equity fund due to the low innovation score.