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Why are investors shunning Leonteq's stock? The derivatives specialist increasingly views major shareholder Raiffeisen as a source of its worries. 

Since Lukas Ruflin took over as CEO, Leonteq has worked its way out of crisis: the company managed to top market expectations just six months later. The derivatives specialist looks on track to hit its target of 300 million Swiss francs ($302 million) in revenue next year.

But investors aren't acknowledging the progress, and Leonteq's stock has nosedived 43 percent in the last 12 months, against the backdrop of a 15 percent stronger Swiss market. Ruflin, who took over during the turnaround last spring, ordered hasty cash call and scrapped Leonteq's dividend. This year, he said the company had seen a slow start to 2019.

Forgotten Pledge

Within Leonteq, executives are increasingly blaming major shareholder Raiffeisen as the real reason for investors' mistrust of its stock. The Swiss bank has since 2016 publicly toyed with the idea of offloading the 29 percent stake it holds in the boutique to a strategic investor.

Patrik Gisel, Raiffeisen CEO until last year, even told finews.ch as much (available in German only). The move is part of a strategy to unbundle – sell or at least reduce stakes – roughly 100 stakeholdings that Raiffeisen accumulated under its former CEO Pierin Vincenz. Leonteq is by far the largest remaining chunk that Raiffeisen hasn't yet addressed.

The timing would have been ideal last year, when Leonteq's stock was near 65 francs – but at that time, Raiffeisen was engrossed in the largest scandal in the bank's 120-year history. Thus, the stake sits in Raiffeisen's books – as a volatility risk. Last year, the bank wrote down 57 million francs following a reduction of the Leonteq holding's book value of 54 million francs, according to its annual report (in German).