Inspired from the real events, the ‘King of Stonks’ is loosely based on the infamous Wirecard scandal of Germany. Wirecard was a payment processor and financial services provider based in Munich.
Wirecard’s top management led by CEO Markus Braun and two high-ranking executives were accused of market manipulation, embezzlement and fraud. The company reportedly defrauded creditors of billions of euros, leading to its insolvency.
Back to the Netflix series, King of Stonks tells the story of Felix Armand, an overly-ambitious and greedy computer programmer of a start-up CableCash.
This Thomas Schubert-starrer series is also referred to as the German version of The Wolf of Wall Street.
While his boss Magnus hogs the limelight, Felix lurks in the shadows battling the mafia, investors, regulators and short sellers.
The series underscores how integrity can be compromised when big money is involved.
While Felix is plotting to keep the company afloat, it becomes even tougher for the over-hyped stocks of Cable Cash to maintain their levels. And before anyone knows it, the most successful fintech company's stocks turn into over inflated stonks.
Key money lessons to draw from the Wirecard incident and the Netflix series it inspired:
Shortcut to success: Term greed and manipulation can be a short term route to financial success but the success is not long-lasting. Sooner or later, deceit and fraud would catch up on you. So, while earning money is important, there is no shortcut to it.
Spot the red flags: When a financial technology firm is focussing too much on gambling and pornography websites and payments made on these platforms, it should not be seen as a healthy sign of company’s growth.
In the series, the company’s CEO Magnus A. Cramer (Matthias Brandt) is made to deal with the porn producers and the mafia and make some bizarre deals that were harmful to the company.
Short sellers: Fraud can be suspected by short sellers. and when major investors start short selling a company’s stock in a big way, it could mark the beginning of an end.
Accounting frauds: Irregularities in books can be a short-term ploy to gain investors' attention but it does not lead to real gains by any stretch of imagination.
Big investors: Just because a start-up has famous investors and a reputable auditing firm auditing its accounts – it should not be seen as a guarantee of its credibility. Wirecard, for instance, had €900 million investment from Softbank and its accounts were audited by EY.