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Investing.com - Paris-listed shares of Worldline (EPA:WLN) rose by as much as 12.1% on Thursday, regaining some of the stock’s heavy losses logged in prior session.
Trading of the shares was temporarily halted by Euronext Paris after the spike.
Worldline shed more than a third of its value on Wednesday -- its second-largest one-day loss -- following a report from a collection of 21 European media outlets that the digital payments group had covered up client fraud in order to protect revenue.
The report alleged that Worldline had continued to do business with these clients, even though German regulator BaFin had previously banned its subsidiary Payone from working with them over a failure to adhere to anti-money laundering and anti-fraud rules.
France-based Worldline denied the allegations and said in response that it has been aiming to strengthen its merchant risk controls and terminate business with non-compliant customers since 2023.
In a note to clients, analysts at Morgan Stanley (NYSE:MS) said Worldline CEO Pierre-Antoine Vacheron attempted to reassure investors and other key stakeholders in a conference call after the markets closed on Wednesday. Vacheron said there was "nothing more to be done in terms of merchant terminations of significant scale," according to the brokerage.
Vacheron also confirmed that, besides regular audits from regulators, he was not aware of any other ongoing investigation related to the client accounts mentioned in the report or in the broader business, the analysts said.
But they flagged that several key questions remain, including uncertainty around how the report will impact merchant retention, whether Worldline’s rebuttal will be enough to reassure investors, and the potential for further regulatory scrutiny.
"[T]hese are all questions that need to be answered for investors to regain confidence in reengaging with the equity story," the analysts wrote.