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Flatexdegiro boss leaves: Niehage announces withdrawal
Flatexdegiro boss Niehage resigns after Förtsch criticism. Find out more about the background and effects on the company. #Flatex #Niehage #Förtsch #stock market
Flatexdegiro boss leaves: Niehage announces withdrawal
The long-time CEO of Flatexdegiro, Frank Niehage, announced his resignation on April 30 on Monday after major shareholder Bernd Förtsch publicly criticized the company's strategy. Despite his resignation, Niehage will remain a shareholder, but will vacate his position due to different views on strategic development and in the interests of the company. The company, which is also known as the jersey sponsor of the Borussia Mönchengladbach football club, announced that CFO Benon Janos and Chief Technology Officer Stephan Simmang will temporarily take over responsibility as co-chief executives.
The announcement of Niehage's resignation has an impact on the upcoming general meeting on June 4th, as Bernd Förtsch has announced that he does not want to relieve Niehage and the chairman of the supervisory board, Martin Korbmacher. Förtsch, who owns around 20 percent of the shares in Flatexdegiro, is dissatisfied with the development of the share price, which has risen by 87 percent in the last five years, but has increased by 8 percent in the last twelve months.
Förtsch complains that Flatex is valued at a discount of at least 30 to 40 percent compared to similar companies such as Swissquote. He criticizes the lack of strategic initiatives such as cryptocurrency trading or credit cards. Although the share price is well below the high of almost 30 euros in summer 2021, Flatex is one of the largest brokers in Germany with 2.8 million customers. However, the company is increasingly having difficulty competing with neobrokers such as Trade Republic and Scalable Capital.
Flatex was founded in 1999 under the name Pre-IPO AG by Bernd Förtsch and was able to grow in 2019 through the takeover of Degiro and market entry in 18 countries. In spring 2022, the financial regulator Bafin discovered organizational deficiencies at Flatex and demanded an equity surcharge. Niehage planned to use the excess capital to buy back shares, which in turn met with criticism from Förtsch.