Republic First Bank is being confused with First Republic
A case of misidentification is causing a sell-off in Republic First bancorpfell more than 40% this month because investors confused with Bank of the First Republic.
“We are NOT the First Republic Bank,” First Republic CEO Thomas Geisel wrote in a blog post. letters on the company’s website. “It is important to fully understand that there is a significant difference between these banks, other ‘Startup’ or ‘crypto-focused’ banks versus Republic Bank and thousands of banks. other communities.”
Confusion is not new. The companies first disputed the naming rights 20 years ago, and traders still have trouble distinguishing between the two. But now it has become a serious problem.
On March 17, Philadelphia-based Republic First shares plummeted as much as 28%, their biggest single-day drop since 1994. The company has no news that could trigger a sell-off. But San Francisco-based First Republic did – it got a rescue package Wall Street takes the warningits shares fell by as much as 35%.
Although the name and stock symbol may be the same, the two banks cannot be different. Republic First is a regional bank focused on commercial and retail clients. First Republic, on the other hand, specializes in private banking for wealthy clients.
The first true Republic originally called itself the First Republic after a merger 1996 between the Bank of the Republic and the First CEO. But that caused a dispute with the other First Republic, established in 1985. The First Republic solved the problem by swapping its name, but keeping the FRBK ticker. The First Republic has the symbol FRC.
“In any other time frame, it looks like the sell-off was overdone, but it’s hard to say for sure given the turmoil we’ve seen in banks in general.” Flute machine analyst Frank Schiraldi said.
Shares of Republic First rose 14% on Friday, its biggest gain since September 15, but ended March down 32%.
Republic First is more focused on retail investors than its peers, Schiraldi adds, a group of traders that are more prone to misbranding. More than 16 million shares of the bank changed hands in March, the highest monthly volume since its launch in 1998.
A spokesperson for Republic First declined to comment. A representative for the First Republic did not respond to a request for comment.
Of course, this isn’t the first time the market has seemed confused about the identities of companies with similar names.
In 2021, Elon Musk ignited a 5,100% bull run at Signal Advance Inc. after he introduced the unrelated messaging service Signal in a tweet. Later that year, Zevia PBC and Zenvia Inc. public debut on the same day after pricing IPOs at exactly the same size, the pair tumbled on launch. A few months later, Meta Materials Inc., a favorite retail trader, regroup as the parent of Facebook renamed Meta Platforms Inc.
During the 2020 pandemic, Fangdd Network Group Ltd. rose 395% in just one day in hot trading for real FANG stock. Traders also boosted the share price of marketing firm ClubHouse Media Group Inc. more than 1,000% after confusing it with a Apps with similar names.
Also in 2020, headquarters in Beijing Launch Technologies Inc. than duplicated as investors try to increase bets on video conferencing platform Zoom Video Communications Inc.
“The challenging part was that we were running out of special names,” said AJ Ericksen, then a corporate partner at Baker Botts, said at that time. “Retail investors started typing ‘Zoom’ and got that.”