Only recently, the company was able to prove once again with fresh figures that the business of the badly stricken Steinhoff Group is not so bad. Respectable growth was seen across all divisions and even respectable profits were generated at the operating level.
Nevertheless, the accounting scandal that became known in 2017 still weighs heavily on the furniture group. So heavily, in fact, that the resulting debt burden makes it impossible for the company to continue as a going concern. Currently, interest alone is eating up all profits and it is probably no coincidence that only operating profits were reported in the last interim report.
Things are looking up for the Steinhoff share
In order to avoid going into insolvency, the management has been fighting for a long time to reach an agreement with the creditors. Most recently, the settlement offer was significantly increased and a decision is now due at the beginning of September. Many investors expect a positive outcome and have already positioned themselves for it.
Last week, this brought the Steinhoff share price gains of a formidable 21.4 percent and the price rose for the first time in a long time to 0.139 euros. It is quite possible that things will continue like this in the coming days, but shareholders will still have to live with enormous risks.
What could go wrong?
The further development of the Steinhoff share now depends entirely on the decision of the creditors. The creditors would have to accept substantial cuts in the settlement under consideration. Without an agreement, however, they could face total loss. That is precisely why there is much to suggest that an agreement will be reached.
However, there is no guarantee that this will happen. In a little more than a week, the Steinhoff share is likely to experience enormous price movements in any case. The only thing that remains open is in which direction it will go. There is virtually no room at all between one of the potentially biggest comebacks in the history of the stock market and a fall into the bottomless pit.