On Wednesday, First Republic Bank's (FRC) shares experienced a massive drop as investors monitored a potential rescue deal for the struggling regional bank.
The stock saw a decline of approximately 30% on Wednesday. That's following a nearly 50% loss on Tuesday…
With a decrease of over 95% year-to-date, First Republic's shares hit an all-time low on Wednesday, causing multiple halts for volatility.
This week's drop came after the San Francisco-based lender reported losing roughly 40% of its deposits in the first quarter.
This raised concerns about its stability among customers and investors, especially after the collapse of Silicon Valley Bank last month, which had a similar financial profile.
In an attempt to reshape its balance sheet, First Republic stated in its quarterly report on Monday that it was exploring strategic options.
Despite 11 larger banks infusing $30 billion of deposits into First Republic, the bank experienced a steep decline in deposits.
Advisors to First Republic are trying to convince some of these banks to provide further support by purchasing some of the bank's assets at above-market rates, which would result in losses for the other banks.
However, the advisors argue that allowing First Republic to fail would be even more costly due to higher regulatory costs and fees.
If First Republic can sell off some of its assets, it plans to raise equity, which would dilute current shareholders.
Sources have revealed that government officials are presently reluctant to intervene in the First Republic rescue process.
Get Your Money Out of U.S. Banks Immediately
A Wall Street legend has warned 8.4 million Americans to prepare immediately.
“A historic financial reset in 2023 could cause a run on the banks unlike anything we've seen in our country's history,” he says.
Marc Chaikin has already appeared on 30 different TV networks to share his warning. Even CNBC's Jim Cramer has taken notice.
But few people realize this could actually happen on U.S. soil. Or what a sizable impact it could have on your wealth, especially if you have large amounts of cash in the bank right now.
Chaikin is best known for predicting the COVID-19 crash, the 2022 sell-off, and the overnight collapse of Priceline during a CNBC debate. In his 50-year Wall Street career, he worked with hedge funds run by billionaires Paul Tudor Jones and George Soros.
But today, he is now urging you to move your money out of cash and popular stocks and into a new vehicle 50 years in the making.
“This is by far the best way to protect and grow your money in what will surely be a very difficult transition for most people,” Chaikin says.