Banc Of California's Crazy 24 Hours
An intriguing plot unraveled Tuesday, sinking shares of Banc of California Inc (NYSE: BANC) deep into the abyss. The lender's stock ended the session down 29.05 percent at $11.26 after being down at $10.93 intra-day. However, a strong response from the company and its third-quarter numbers have served to reverse sentiment, culminating in a crazy 24-hour roller-coaster ride for the bank.
The trigger that led to the collapse in the shares was an article published in the Aurelius Instablog on Seeking Alpha. The article concluded after a careful investigation, fact finding mission, analysis and review that Banc of California is simply uninvestible.
- Banc of California's senior-most officers and board members have links with Jason Galanis, who boasts of the notorious record of secretly gaining control of banks and public companies via front men, looting assets and leaving investors and taxpayers with hundreds of millions in losses.
- The Seeking Alpha blog also drew a parallel between Banc of California and Gerova Financial Group Ltd (previously trading (OTC: GVFG)) , which has since then collapsed on revelation of its ties with Galanis.
Banc Of California's Rebuttal
In an 8K filing, Banc of California said it is demanding that Seeking Alpha remove and retract article, branding the article as a reckless and defamatory libel. The bank also clarified that it is aware of matters relating to Jason Galani and would initiate an independent investigation into the same.
Earlier Wednesday, Banc of California reported earnings per share of $0.59, ahead of the consensus estimate. The company's top-line number of $87 million also topped the Street forecast of $87.1 million.
With the bank's response and the earnings beat, it looks like the slide in the shares will be halted. In pre-market trading, the stock was up 15.90 percent at $13.05, well off its 52-week high of $23.24. Can Banc of California defend itself with verve and extricate itself from the scandal? Only time will tell.
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