Republic First Bancorp has fallen more than 40% this month.
“We are not First Republic Bank,” Republic First CEO Thomas Geisel wrote in a letter posted on the company’s website. “Fully understand that there are significant differences between these banks, other ‘startup’ or ‘crypto-focused’ banks, and Republic Bank and thousands of other community banks.” is important. ”
Confusion is nothing new. The two companies first clashed over naming rights 20 years before him. But now it has become a serious problem.
Philadelphia-based Republic First shares plunged 28% on March 17. This was his biggest intraday deal since 1994. But San Francisco-based First Republic did — receiving a bailout package that Wall Street received as a warning, and its stock fell as much as 35% of his.
Although the names and ticker symbols may be similar, the two banks are completely different. Republic First is a regional bank focused on commercial and retail customers. First Republic, on the other hand, specializes in private banking for wealthy customers.
Republic First was originally called First Republic after the merger of Republic Bank and First Executive in 1996. However, it caused controversy with the other First Republic, founded in 1985. The First Republic solved this by changing its name, but not the FRBK ticker. First Republic is denoted by the symbol FRC.
Piper Sandler analyst Frank Schiraldi said: “In other kinds of timeframes, it looks like the selling has gone too far, but given the turmoil we’ve seen across banks, it’s hard to say for sure.
Shares of Republic First jumped 14% on Friday, its biggest gain since Sept. 15, but fell 32% in March.
a mix-up occurs
Republic First has a higher concentration of retail investors than its peers, Shiraldi added. A class of traders often confuses company names, and in March he saw more than 16 million shares of the bank trade, the highest monthly volume since its inception in 1998.
A spokeswoman for Republic First declined to comment. First Her Republic representatives did not respond to a request for comment.
Of course, this isn’t the first time the market seems confused about the identities of companies with similar names.
In 2021, Elon Musk caused a 5,100% rise in Signal Advance Inc. after promoting unrelated messaging service Signal in a tweet. Later that year, Zevia PBC and Zenvia Inc. went public on the same day after pricing exactly the same size initial public offerings, but the pair tumbled on debut. A few months later, Facebook’s parent company changed its name to Meta Platforms, sparking a backlash from retail trader favorite Meta Materials.
During the 2020 pandemic, Fangdd Network Group Ltd. surged 395% in a single day during a hot session for real FANG stocks. Traders also boosted shares of marketing firm Clubhouse Media Group by more than 1,000% after confusing it with a similarly named app.
Also in 2020, Beijing-based Zoom Technologies Inc. more than doubled as investors sought to increase their investment in video conferencing platform Zoom Video Communications Inc.
AJ Ericksen, a corporate partner at Baker Botts at the time, said: “Retail investors start typing ‘Zoom’ and get it.”