First Republic Bank has seen its stock prices plummeting for the second consecutive day, leading to trading halts due to volatility. Reports of a potential government seizure have been circulating, causing the financial institution’s stock to reach a 52-week low. The bank is now exploring salvation measures to protect itself from further financial ruin.
— Watcher.Guru (@WatcherGuru) April 26, 2023
First Republic Bank’s stock prices have been in a downward spiral, losing 94% of its value this year alone. Wednesday’s trading halt was caused by a drop of more than 23% in the bank’s share price. Investors are increasingly worried about the bank’s financial health, leading to a market frenzy that has seen the bank’s stock lose even more value.
Concerns Over Government Seizure
Reports of a possible government seizure of the bank have only served to heighten investor concerns. With the bank’s stock prices at an all-time low, a government takeover could spell disaster for the institution. First Republic Bank is said to be exploring alternative measures to protect itself from such a scenario.
The bank reportedly seeks to divest between $50 billion to $100 billion in various assets to help salvage its finances. The institution has lost access to $100 billion in deposits, further exacerbating its financial situation. The bank is now looking for strategic options to help get back on track.
While First Republic Bank’s stock prices continue to fall, other regional banks have seen an increase in their stock prices. PacWest saw its stock increase by 15% despite losing billions in the first quarter. This development only serves to highlight the concerning predicament that First Republic Bank currently finds itself in.