NYCB plunges 40% following Wall Street Journal report

Shares of New York Community Bancorp (NYCB.US) plunge over 40% today. Stock has been trading lower since the start of today's trading but declines accelerated following release of Wall Street Journal report. WSJ reported that troubled lender is exploring a possible equity sale. NYCB has been in freefall since the end of January, when bank reported unexpected Q4 loss and spike in provisions for credit losses amid it's significant exposure to the commercial real estate sector. Stock plunged over 80% since. Today's report from WSJ suggests that situation at the bank is really bad - equity sale is a much more expensive way of attracting funding than debt issuance, and the fact that NYCB is considering it may mean that it struggles to raise funds via debt markets. Sell-off in NYCB shares is putting pressure on other regional banks as well but, so far, did not manage to derail sentiment on the broader market.

Source: xStation5