[FRANKFURT] Delivery Hero will replace defunct payments company Wirecard in Germany's prestigious DAX benchmark on Monday, the index's owner has announced. Read more at The Business Times.
Delivery Hero will replace defunct payments company Wirecard in Germany's prestigious DAX benchmark on Monday, the index's owner has announced.[FRANKFURT] Delivery Hero will replace defunct payments company Wirecard in Germany's prestigious DAX benchmark on Monday, the index's owner has announced.
Following an index rule change in response to Wirecard's scandalous collapse in June, the food delivery company will take its place in the 30-member gauge ahead of the next quarterly review due Sept 3. The change, implemented by DAX owner Deutsche Boerse, allows for insolvent companies to be removed from its indices with two trading days notice.
Berlin-based Delivery Hero only went public about three years ago. Its stock has gained almost 50 per cent since January, as virus-induced lockdowns boosted demand for food delivery in its key markets. Joining the DAX could further propel the stock as tracker funds are forced to increase their weightings.
Delivery Hero's addition may spark some controversy as the company is yet to achieve a single profitable year, raising questions about the prudence of including it alongside established heavyweights such as Siemens and SAP. Deutsche Boerse selects DAX members based on valuation and volume of shares traded rather than company fundamentals, so Delivery Hero's losses won't prevent it from acceding. In contrast, S&P Dow Jones Indices, the operator of the US S&P 500 benchmark, requires new entrants to have been profitable in their most recent quarter and over the past year.
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