NYCB stock crashes again on report it's seeking cash

New York Community Bancorp Inc (NYSE: NYCB) just crashed 40% following a report that it’s looking for cash infusion.

NYCB stock is now worth less than $2.0

Anonymous sources told the Wall Street Journal on Wednesday that the struggling regional bank is seeking cash from outside investors to strengthen its balance sheet.

The news arrives only days after $NYCB disclosed “material weaknesses” in its “internal controls related to loan review”.

New York Community Bancorp also named Alessandro DiNello its new chief executive last week after reporting a loss of $2.7 billion in the fourth quarter – alarmingly more than expected.  

Wall Street currently has a consensus “hold” rating on NYCB stock that’s lost about 80% since the start of this year and recently slashed its dividend by a whopping 71%.

Could NYCB attract takeover interest?

New York Community Bancorp last week committed to cutting its exposure to commercial real estate (CRE) as well. According to Keith Horowitz - a Citi analyst:

$NYCB is yet to comment on the WSJ report on Wednesday.

Note that the ongoing weakness in NYCB shares is similar to what was seen in Signature Bank, Silicon Valley Bank and first Republic Bank - all of which eventually collapsed in spring of 2023.