The embattled lender is exploring strategic options
First Republic Bank (NYSE:FRC) is 13.3% lower this afternoon, last seen trading at $27.03 following reports that the bank could be saved and options traders are taking notes.
According to a Bloomberg report, First Republic bank is looking for strategic options, including a potential sale. Separately, The Wall Street Journal reported that JPMorgan Chase (JPM) and Morgan Stanley (MS) are among the firms having deal talks with the embattled bank.
Just past the session's halfway mark, 178,000 puts and 111,000 calls have been traded -- 15 times the average intraday volume. Positions are being opened at the top 10 contracts, led by the March 10 put.
S&P Global Ratings and Fitch Ratings yesterday cut their ratings on FRC to junk. Coming into today, 10 of 19 firms still rated First Republic Banks tock a "strong buy," while the 12-month consensus target price of $138.79 is a 430.5% premium to current levels. This leaves the equity open to more downgrades and/or price-target cuts.
First Republic Bank stock kicked the week off by slipping to an all-time low of $17.53. Though it's holding just above that level today, FRC is still down more than 84% over the last 12 months, and sports a 78% year-to-date deficit.