Movers: Amazon.com, First Republic, New York Community Bancorp, UBS

Scott Peters
20 Mar, 2023
New York City

Credit Suisse Group AG plunged 52% to 96 cents in New York trading after the troubled Swiss bank agreed to be acquired by the rival UBS. 

In a deal negotiated by the Swiss regulators and the Swiss National Bank, UBS agreed to pay 50 Swiss cents per share or $3.25 billion, significantly less than the expected price for shareholders. 

The Swiss National Bank agreed to provide up to 100 billion Swiss francs in liquidity and the Swiss government will offer a loss guarantee of up to 9 billion Swiss francs but UBS will be responsible for the first 5 billion Swiss francs of potential losses. 

Total assets held by Credit Suisse had declined to $70 billion just before the announcement of the transaction, indicating that a substantial part of the assets may be impaired or is expected to be impaired. 

The deal orchestrated by the Swiss regulators and the central bank will pay stockholders but will write down $17 billion of AT1 bondholders which generally have a higher priority than shareholders in the credit structure.

UBS Group AG increased 4% to $18.95 in New York and advanced 1.3% to 17.33 Swiss francs.  

Regional banks rebounded in New York trading and Western Alliance Bancorp advanced 3%, PacWest soared 16% and Key Corp increased 4%. 

First Republic Bank plunged 15.9% to $19.30 after the rating agency Standard & Poor's lowered its rating on the embattled bank's bonds to B+ from BB+, deeper in the junk bond territory. 

Amazon.com, Inc declined 2.2% to $96.72 after chief executive Andy Jassy said in a memo to employees that the company is planning to layoff 9,000. 

The latest announcement follows the elimination of 18,000 jobs in November ahead of the peak holiday sales period, after the online marketplace operator added 800,000 positions in two years of Pandemic between 2020 and 2021. 

The current job cuts are expected to be hit the hardest in advertising and cloud computing unit AWS. 

New York Community Bancorp, Inc soared 35% to $8.83 after the regional bank's subsidiary Flagstar Bank will assume nearly all bank deposits and own and operate all 40 branches of the former Signature Bank from the FDIC. 

Foot Locker Inc declined 5.2% to $40.07 after the specialty athletic retailer reported a fall in total sales and a sharp decline in earnings in the fourth quarter. 

Sales in the fourth quarter ending on January 28 decreased 0.3% to $2.33 billion and net income plunged to $19 million from $103 million and diluted earnings per share dropped to 19 cents from $1.02 a year ago. 

Comparable sales in the quarter increased 4.2%.  

During the fourth quarter, the company paid a quarterly dividend of 40 cents per share and repurchased 4.1 million  shares for a total of $129 million and paid a total of $150 million in dividends.  

The Board of Directors declared a quarterly cash dividend of 40 cents per share payable on April 28 to shareholders of record on April 14. 

In the full-year 2022, total sales fell to $8.6 billion from $9.0 billion and net income dropped to $342 million from $893 million and diluted earnings per share fell to $3.58 from $8.61.