Credit Suisse has ups and downs in one day
Swiss bank Credit Suisse has sort of been going through it lately. It’s dealt with scandals in recent years (including that time it lost billions of dollars on a bad bet with Bill Hwang), and it’s going through an overhaul later this month. On top of that, the one specialty it has up its sleeve, which is being a great investor of rich people’s money, has been hit hard by the simple fact that there are fewer rich people out there during a recession.
But Monday was a whole different weird, kind of bad day for the bank. See, on Friday, CEO Ulrich Koerner sent out a memo saying the bank’s capital levels and liquidity are holding up, even though the bank is at a “critical moment." The idea was to shut down rumors surrounding the bank’s overhaul plans. But as a result, it saw some massive jerking around of its stocks.
Only 15 minutes after trading opened on Monday, the company was down about 12% in stock value. It stayed pretty low until some analysts backed up Koerner’s claim that the company was doing better than speculation suggested, and by the end of the day, its stocks were back up to around the amount they closed at on Friday.
“We are in the process of reshaping Credit Suisse for a long-term, sustainable future – with significant potential for value creation," wrote Credit Suisse CEO Ulrich Koerner in the memo released on Friday. “Given the deep franchise we have, with a long-standing focus on serving some of the world’s most successful entrepreneurs, I am confident we have what it takes to succeed."
“The liquidity position is very healthy," said analysts at Citigroup in a note to investors. “Rather than liquidity concerns, we see the current move in spreads as an inconvenience for funding costs."