/ world today news/ Shares of PacWest (PACWW) and Western Alliance (WAL) fell on Tuesday as investors remained convinced that the worst was yet to come for these troubled banks.
“The decline in the shares of both institutions came a day after JPMorgan Chase ( JPM ) acquired most of First Republic ( FRC ) in a deal that was intended to restore stability to the banking system after two months of turmoil.
Shares of PacWest ended trading Tuesday down 28%, while shares of Western Alliance fell 15%. Other regional banks also fell sharply, including Zions ( ZION ), Comerica ( CMA ) and Key ( KEY ), which fell 9-12%.
One of the new pressures on these companies is short selling, which appears to be targeting lenders they see as most vulnerable. Data from S3 Partners showed that short sellers increased their bets against regional bank stocks by more than $440 million over the past 30 days.
As of Friday, PacWest’s short position has risen to more than 18% of the stock, making it the second-most shorted regional bank over the same period.
PacWest and Western Alliance were also among the financial institutions, along with First Republic, that came under scrutiny after the March 10 and March 12 bankruptcies of Silicon Valley Bank and Signature Bank.
Both lenders, as well as First Republic, lost a significant amount of deposits in the first quarter as customers gravitated to the perceived safety of big banks or the higher returns offered by money market funds. PacWest, a lender based in Beverly Hills, Calif., lost 17 percent of its deposits, Phoenix-based Western Alliance lost 11 percent, while First Republic lost 41 percent.”
Translation: ES
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