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First Republic had a market cap of $22 billion 2 months ago. It's not mentioned in the press release, do the investors get nothing?
by ipsum2 3y ago
First Republic had a market cap of $22 billion 2 months ago. It's not mentioned in the press release, do the investors get nothing?
- boeingUH60 3y agoThey are getting wiped out...such is the risk of equity investments.
- GalenErso 3y agoThis is the way.
- JumpCrisscross 3y ago> do the investors get nothing? Correct. JPMorgan “is not assuming First Republic’s corporate debt or preferred stock” [1]. Including that debt, the total value vaporised could be up to $40bn [2]. That said, JPMorgan acquired “substantially all of the assets of First Republic Bank,” so there will be scraps to fight over. [1] https://www.ft.com/content/0c61a540-e6be-4bca-8054-841d9983756b https://www.ft.com/content/0c61a540-e6be-4bca-8054-841d99837... [2] https://ycharts.com/companies/FRC/enterprise_value https://ycharts.com/companies/FRC/enterprise_value
- deleted 3y ago[deleted]
- loeg 3y agoI'm surprised the debt got totally wiped out too on $220B in (HTM) assets vs $100B in deposits. Those assets have to be severely discounted to arrive at JPMorgan's $2.6B windfall figure. Just last week Levine was saying: > First Republic estimated as of Dec. 31 that its assets were worth about $27 billion less than their carrying value. So figure its assets are worth something like $206 billion on a good day. So I'm wondering where the gap is. > Meanwhile it has ... about $105 billion of secured borrowing from the Federal Reserve and Federal Home Loan Bank system. Presumably JPMorgan is assuming FR's debt to the these central banks?
- anomaly_ 3y agoPeople not understanding the capital structure of a business strikes again!