PacWest (PACW) Collapse Case

• In May 2023, the PacWest stock price collapsed after the FED rate hike and sharp deposit outflows. As a result, shareholders took a huge loss in their $PACW holdings.

• Investors suspect PacWest of concealing the financial impact of rising interest rates, liquidity shortages, and other issues which ultimately led to a buyout by Banc of California.

On May 3, 2023, Bloomberg published an article titled “Regional Banks Sink as PacWest Weighs Strategic Options” which stated that “PacWest Bancorp led a renewed slide in regional banks after a report that it’s weighing strategic options including a sale heightened concerns that the turmoil engulfing smaller lenders is far from over.”

On the same day, Forbes published an article titled “PacWest Stock Falls 39% After Federal Reserve’s Latest Interest Rate Hike” which stated that “PacWest has been considering a breakup or capital raise.”

On this news, $PACW fell over 50%, damaging shareholders.

Furthermore, on May 11, 2023, PacWest revealed that “during the week ended May 5, 2023, our deposits declined approximately 9.5%, with a majority of that decline occurring on May 4th and May 5th after the news reports on the afternoon of May 3rd.” On this news, $PACW fell nearly 23%.

Investors have reasons to suspect PacWest of concealing the financial impact of rising interest rates, liquidity shortages, and other issues which ultimately led to a buyout by Banc of California.