From the crypto market to the collapsed Silicon Valley Bank, Cramer has given another wrong prediction about First Republic Bank.
Jim Cramer, the host of CNBC’s Mad Money, has once again missed the mark with another one of his predictions for the stock and equity markets.
Less than two months after calling the embattled First Republic Bank a “very good bank,” the TV personality has turned around to tell the company’s shareholders that there is nothing for them as US authorities have taken it into receivership.
A “Very Good Bank” Turned Sour
The bank’s troubles started in March when Silicon Valley Bank (SVB) had significant outflows. On March 10, when US authorities shut down SVB. Cramer tweeted that First Republic was the new focus, commending the bank.
FRC is new focus… very good bank
— Jim Cramer (@jimcramer) March 10, 2023
On the contrary, the financial institution had severe liquidity issues, forcing it to reduce its borrowings and suspend dividend payments to stockholders.
US authorities stepped in over the weekend to protect depositors and worked out a purchase agreement with JPMorgan Chase Bank. First Republic’s stock has fallen from levels above $200 to $2.98. When writing, the stock was trading at $3.51, a 71% decline from its price a week ago.
Inverse Cramer Strikes Again
While First Republic’s shares tumbled last week, Cramer released statements that contradicted his previous stance on the bank’s future. On one occasion, he praised his colleague David Faber, a financial journalist, for saying that the bank would have a hard time surviving the weekend.
Kudos to my colleague @davidfaber for saying that First Republic would have a hard time surviving the weekend when there was massive buying in the stock in the first half hour of trading. What the heck? Other outlets were saying the opposite with no real evidence— Jim Cramer (@jimcramer) April 29, 2023