What Caught Our Attention in the Investment World? – Week of October 24-28, 2022

By Kuldip K. Ambastha

On Thursday, October 27, 2022, the stock of Credit Suisse Group AG (CS), a prominent Swiss financial institution with operations around the world, had a steep price drop of -20.0% per share for the trading day. Credit Suisse Group in the recent past has had troubles linked to the scandals around Greensill Capital and Archegos Capital Management, and has the potential to become a “meme stock” if the stock price continues to decline. In 3Q2022, Credit Suisse Group reported a quarterly pre-tax loss, and also announced a strategic overhaul restructuring plan which will change the institution significantly going forward.

This highly complicated, long-term plan includes resurrecting a Credit Suisse First Boston (aka: CS First Boston, aka: CSFB) investment banking unit to be led by star dealmaker Michael Klein with the hopes of an eventual initial public offering (IPO), laying off many current employees, changing senior management professionals, focusing more on wealth management, and raising additional capital, among other action items. The central bank [Swiss National Bank (SNB)] of Switzerland (aka: the Swiss Confederation) is supportive of the plan, while Credit Suisse Group’s Swiss regulator [Swiss Financial Market Supervisory Authority (FINMA)] seems guarded. Many details still need to be fleshed out further, and accordingly Wall Street equity research analysts and Credit Suisse Group shareholders are currently mixed in their viewpoints on the plan based on the limited details now available.

Keywords – Credit Suisse Group AG, Credit Suisse Group, Credit Suisse, CS, Credit Suisse First Boston, CS First Boston, CSFB, Michael Klein, Greensill Capital, Archegos Capital Management, financial institution, Switzerland, Swiss Confederation, Swiss, Swiss National Bank, SNB, Swiss Financial Market Supervisory Authority, FINMA, 3Q2022, overhaul, restructuring, meme stock.

Disclosure – The principals and clients of Ambastha Financial LLC have no positions in CS.

Disclaimer – No recommendations are being made via this post. Past performance is not an indicator of future performance. As an investor, you should do your own research and seek professional advice from a Registered Investment Adviser (RIA). You can lose money by investing in stocks and other instruments. Ambastha Financial LLC does not assume any responsibility (legal or otherwise) for any losses that may occur as a result of actions taken based on this post. All content copyrighted © 2022 – Ambastha Financial LLC.




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