31. March 2021 | 09:57 CET
Pollux Properties, Steinhoff, Wirecard - Explosive Penny Stocks!
It is starting again! Insane turbulence, especially in New York, turns individual stocks into 30% rockets or 50% low flyers in one day, while the big stocks in the Dow Jones slowly but surely run towards new all-time highs. Then the sell-off in media and Internet stocks as a family office allegedly faltered. ViacomCBS and Discovery's shares lost 50% last week and are currently barely recovering. The entire banking and brokerage sector was hit with losses of between 4 and 10% - the reason: fear of uncontrollable risks and imbalances in the financial sector. Speaking of risk: We take a look at some interesting penny stocks - there is always something on offer here!
time to read: 4 minutes by André Will-Laudien
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
Pollux Properties - Profit driver of the Asian upswing
The city-state of Singapore is like Switzerland in Europe: somewhat different, expensive and exclusive. Singapore is undoubtedly the most westernized city in Asia. Compared to the rest of Asia, Singapore offers life at the highest standards. These high standards attract a lot of foreign capital to the city, with the growth close to 5% in recent years. In addition, there is a three-part port for the goods industry. Here a large part of the Southeast Asian goods are handled once then brought to Europe and North America by sea.
The Company Pollux Properties has settled in Singapore to profit from this growth. The constant influx from surrounding countries creates housing shortages and high office rents - and land is in short supply. The population in the metropolitan region is growing at an impressive 13% per year. Pollux acts as a real estate developer and portfolio holder with a total of 138,474 built gross floor area and a corresponding construction volume of almost SGD 400 million. Comparing rents, Singapore is among the top 20 international megacities with its own stock exchange, including a futures and options exchange. An important prerequisite for prosperity is also a modern and global banking system on site.
All in all, Pollux Properties manages a real estate portfolio in Singapore with an equivalent value of around SGD 300 million. Liabilities are approximately half of this amount. Another mainstay is the fund management for institutional clients with a current volume of SGD 18 million. Here an increase of about SGD 20 million is expected in the next 5 years. Pollux is very well positioned for the prospering environment in Singapore and is growing steadily due to its market expertise. After 9 months, Pollux has generated a surplus of SGD 187,000 and its cash is bulging at SGD 31.6 million. Pollux shares are currently capitalized at SGD 94 million, the price fluctuates between SGD 0.03 and 0.04, and the medium-term outlook is excellent.
Steinhoff International - Years of shadow boxing enters the final round
There's no time like the present - the speculation at Steinhoff continues. For years, Steinhoff, the German-South African Group in insolvency, has been in dispute with various creditor groups. The back and forth is now coming to an end. The foggy veil about how and whether the Company will continue to operate is increasingly lifting. Since the insolvency announcement, the penny stock has been swinging wildly up and down with each new announcement; currently, the highly indebted Group is still valued at EUR 544 million.
On March 24, 2021, Steinhoff announced the settlement of a dispute with Conservatorium Holdings and with Dr. Christo Wiese. The disputing parties agreed that they will now support Steinhoff's global settlement. However, this must first go through the next extraordinary shareholders' meeting to make a viable resolution available for the creditors and the insolvency administrator.
A day earlier, news hit the ticker. The D & O insurer's managers' liability would like to "buy their way out" of the insolvency by paying EUR 78.1 million, or about 1% of the claim volume of around EUR 7.7 billion, for the managers at the time, which includes Company founder Bruno Steinhoff and Supervisory Board Chairman Christo Wiese.
Steinhoff International Holdings NV has taken the decisive step towards a final decision on accepting the settlement proposal for the injured parties of the accounting fraud, which has been available for months, by opening two protective shield proceedings. At the Annual General Meeting convened for April 30, 2021, the next milestone in dealing with the accounting scandal is to be completed. The extent to which this will be achieved remains to be seen. For the invested shareholders, there will probably be little or nothing left given the massive mountain of debt, but a share listed at EUR 0.1278 has its unique appeal for penny lovers!
Wirecard - Everything cleared up yet?
Wirecard is undoubtedly a showpiece of German financial history. Today, you can still read in the company profiles that Wirecard AG was once one of the leading international providers of electronic payment and risk management solutions. But then it all turned out to be a fraud, the former CFO is on the run and the Company's founder and CEO is at large again after paying a bail of EUR 5 million.
The Wirecard case is so explosive because, although the non-transparent business practices were admonished from many sides, the German financial supervisory authority BaFin had believed in the fraudulent Company's proclamations until the last minute. BaFin even took public action against dissenters such as the critical press or hedge funds. Therefore, the short-selling ban imposed at the time is at the center of the investigations because the alleged billion-dollar fraud at Wirecard might have come to light sooner without this controversial BaFin measure.
That is why the decisive factor in the fraud scandal's political investigation is whether there were objections to the short-selling ban - especially from the Federal Ministry of Finance, to which BaFin reports. Politically, the matter is far from off the table, even if responsibility has been shifted to other hands at BaFin. However, pawns do not help us here; what is needed is the complete clarification of the events at that time, so long as the tracks are still fresh. In any case, the Federal Ministry of Finance is fully responsible for the wrong market signal due to its negligence. Whether the fraudulent actions could have been recognized still has to be meticulously investigated, and all this is happening in the middle of the pandemic campaign and at the beginning of the federal election campaign. The Wirecard share is trading fewer shares every day. The air is probably out of this penny stock. However, the remaining market capitalization still amounts to a proud EUR 49 million. At its peak, it was once just under EUR 25 billion when the stock was trading at over EUR 190 and was in a high-flying frenzy of ever new and record-breaking corporate news.