Credit Suisse Group (CS -7.63%) was falling sharply on Monday, as the stock price was down as much as 10.3% at about 1 p.m. ET. The Zurich-based financial services firm is down about 54% year to date, trading at $4.35 per share.
The Dow Jones Industrial Average was down 246 points (0.8%), the S&P 500 was off 46 points (1.3%), and the Nasdaq dropped 187 points (1.8%) as of the same time.
The embattled financial services firm has watched its stock price tank due to its exposure to a few scandals, including the collapse of Archegos Capital, which faced federal charges of fraud and racketeering. Credit Suisse has suffered in these cases due to risk management failures.
Over the summer, the company named a new CEO, Ulrich Körner, who announced a strategic review to stem the massive losses and get the firm back on track. That review is ongoing, and the company is expected to provide an update in its third-quarter earnings report on Oct. 27.
Last Friday, the stock jumped on the news that Credit Suisse plans to repurchase some $3 billion in debt securities to pay off its debt and take advantage of lower prices. But it also showed investors that the company has sufficient capital and liquidity. The company also announced that it was selling its Savoy Hotel in Zürich to streamline its business.
“The transactions are consistent with our proactive approach to managing our overall liability composition and optimizing interest expense and allow us to take advantage of market conditions to repurchase debt at attractive prices,” company officials said in a release.
The good news from Friday didn’t carry over to this week. On Friday afternoon after market close, there was a report from Bloomberg that three companies — Pimco, Centerbridge Partners, and Sixth Street — were on a short list of bidders for Credit Suisse’s securitized debt business. There have been previous reports of Credit Suisse selling this business, which is seen as part of its strategy to streamline its investment banking operations. The company has not issued a statement on this matter.
Obviously, there is a ton of uncertainty with the future direction of this company right now. Investors should watch for news of the strategic review and the third-quarter earnings report when it is released on Oct. 27. The subsequent call with analysts could reveal more insight into where it is headed.