There’s a lot of news for Credit Suisse (NYSE:CS) stock traders to absorb today. For one thing, the company’s shareholders just approved a plan to raise billions of dollars worth of Swiss francs. Moreover, Credit Suisse anticipates a sizable earnings loss in 2022’s fourth quarter. On top of all that, the company laid off a large number of its workers in China.
Credit Suisse is a famous Swiss financial institution that has faced several challenges this year, such as geopolitical strife and a struggling global economy. Perhaps it shouldn’t be too surprising, then, that Credit Suisse will sustain an earnings loss in Q4.
However, there’s other news to consider. Specifically, Credit Suisse expects to incur a pre-tax loss of up to 1.5 billion Swiss francs, or roughly $1.58 billion, during its fourth quarter. This begs the question of what action the company is taking to address its financial difficulties.
Perhaps the market got an answer to that question — but not the answer it wanted to hear. Reportedly, Credit Suisse’s shareholders approved a capital raise valued at 4 billion Swiss francs, or around $4.2 billion.
What’s Happening With CS Stock?
CS stock fell 5% to 6% in early trading today, so evidently the market isn’t too pleased with the recent developments. Investors might wonder whether the capital raise will involve a large-scale share issuance.
If so, this could cause Credit Suisse’s investors to be concerned about share dilution. Yet, this isn’t the only issue on their minds right now.
Along with everything else mentioned today, Credit Suisse also reportedly laid off approximately one-third of its investment banking team in China. Plus, the company laid off almost half of its China-based research department.
Earlier this month, Credit Suisse Asia Pacific CEO Edwin Low apparently claimed, “China and Hong Kong will be the biggest growth market” in terms of Asia Pacific headcount. Yet, the job cuts seem to contradict the tone of that statement.
All in all, CS stock investors will have to weigh the various developments concerning the Swiss banking giant. So far, they don’t seem particularly happy with what’s going on.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.
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