First Republic Bank's Dividend
And, FedEx's cost reduction strategy.
Today is Friday, March 17, 2023.
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First Republic Bank's Dividend
Shares of First Republic Bank (NYSE: FRC) sunk by 16.98% in after-hours trading on Thursday after the company made several announcements, including the suspension of its dividend.
Details: First Republic is taking a $30 billion rescue package from 11 major U.S. banks. The additional liquidity was needed after several other regional banks closed in the last week or so.
Also: Not including the rescue package, First Republic had $34 billion in cash.
Powering the Story: Due to this liquidity crunch, First Republic also said that it will suspend its stock dividend, which was 27 cents per share. Investors did not like this announcement.
Stock Price: First Republic’s stock is down 71% in 2023, including a 50% drop in the last week.
Final Thoughts: Another day, another bank on the verge of crashing. First Republic needs to stabilize its balance sheet before most investors can feel comfortable about the company.
Notable Earnings Today: XPeng (NYSE: XPEV), Algonquin Power & Utilities (TSE: AQN), Ballard Power (Nasdaq: BLDP), Waterdrop (NYSE: WDH).
Notable IPOs Today: Bellevue Life Sciences Acquisition Corp. Common Stock (Nasdaq: BLAC), Ambrx Biopharma Inc. American Depositary Shares (Nasdaq: AMAM), Four Leaf Acquisition Corporation Unit (Nasdaq; FORLU), Mangoceuticals, Inc. Common Stock (Nasdaq: MGRX), YS Biopharma Co., Ltd. Ordinary Shares (Nasdaq; YS).
Notable Equity Crowdfunding Campaigns Ending Today: Fit App by Macrofit (StartEngine), Pylons (Republic), Virtuix (StartEngine), HiveSkill (Netcapital), Psyonic (StartEngine).
Notable Economic Events Today: Industrial Production (9:15 a.m. ET), Michigan Consumer Expectations / Sentiment (10:00 a.m. ET).
FedEx's Cost-Reduction Strategy
FedEx (NYSE: FDX) posted mixed financial results on Thursday, but shares jumped by 11.54% in after-hours trading because of the company’s cost-reduction efforts.
Financials: FedEx reported earnings of $3.41 per share in the past quarter, which was better than expected. But revenue only hit $22.2 billion, which was below estimates.
Details: Global inflation disrupted the financial results. The company suffered from “continued demand weakness,” specifically at FedEx Express. Lower package volume and higher infrastructure costs impacted FedEx Ground.
But: FexEx’s cost-reduction actions mitigated these challenges and helped the company’s earnings.
Quote: “We’ve continued to move with urgency to improve efficiency, and our cost actions are taking hold, driving an improved outlook for the current fiscal year.” - Raj Subramaniam, FedEx Corp. president and CEO.
Stock Price: Shares of FedEx are down 12% in the last 12 months and are down 3% in the last 30 days.
What’s Next: FedEx will discuss the company’s global transformation and profitability program, called DRIVE, during a program update on April 5.
Final Thoughts: The global freight business is feeling the brunt of economic challenges. But FexEx’s cost-reduction strategy seems to be working.
Bitcoin Surges Beyond $25,000
Bitcoin jumped 8% on Thursday and is up 25% in the last week.
Final Thoughts: Traders are turning to cryptocurrency as traditional banks struggle. Still, crypto is seen as a volatile investment.
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Trends to Watch
Highly Opinionated: Sen. Bennet takes potshot at crypto, says it's less stable than marijuana industry (The Block)
Affordable: Elon Musk’s $25,000 car for the masses was just unveiled—by Volkswagen (Fortune)
About Time: Sanofi announces insulin price cap after actions by Eli Lilly and Novo Nordisk (NBC News)
Approved: F.D.A. Advisers Endorse Paxlovid’s Benefits as a Covid Treatment (The New York Times)
Going Viral: TikTok CEO Says Sale Won’t Protect U.S. Data (The Wall Street Journal)
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