What happened at New York Community Bancorp and how it secured a $1bn lifeline
Investing.com — New York Community Bancorp (NYSE:NYCB) stock has plunged more than 60% since the beginning of the year, with shares plumbing their lowest levels in decades.
The company has faced several headwinds, with its share price plunging in late January after it reported an unexpected fourth-quarter loss. In addition, its share price decline was accelerated amid concerns over its loan exposure.
The January 31 earnings release pushed NYCB shares more than 37% lower to $6.47 per share. However, they have continued to decline since then, currently trading at around $3.50 per share. They are down 66% so far in 2024.
Zooming out, NYCB shareholders have had an extremely tough year, with the stock down 59% over the last 12 months and 70% in the last six months.
Morgan Stanley recently cut its NYCB price target to $4 from $6 per share, while Citi lowered its target for the stock to $3.50 from $5 per share in a recent note.
The recent NYCB share price slide could have been worse, with the stock following as much as 40% on Wednesday following reports that it was seeking a financial boost. It did manage to recover and close the session 7% higher in reaction to news that the company announced a $1 billion cash infusion from a group that includes former Treasury Secretary Steven Mnuchin.
The embattled lender received a crucial financial lifeline on Wednesday, securing a cash infusion of over $1 billion. Liberty Strategic Capital, led by ex-Treasury Secretary Steven Mnuchin, contributed a $450 million share of the cash.
The rest came from Hudson Bay Capital, Reverence Capital Partners, and Citadel Global Equities, as well as other institutional backers and certain executives of the bank.
In the aggregate $1.05 billion equity
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