First Republic stock investors face 'wipe-out,' analyst says
JPMorgan did not assume First
Republic’s corporate debt or preferred stock, meaning institutional investors will not be made whole.
Neither JPMorgan nor the Federal Deposit Insurance Corporation have explicitly said what the
purchase means for First Republic common shareholders. Those shareholders are not expected to be made
whole either, though, according to the banking equity analyst team at Wedbush Securities.
“We
expect a wipe-out of common shareholders following FRC entering receivership and being sold to JPM,”
Wedbush Securities equity analyst David J. Chiaverini wrote in a note to clients on Monday.