After falling by more than 80% since last week, shares of Doral Financial (DRL) have regained 42% Friday on volume that is running nearly 4 times its 30-day average. Although the move is not attributed to any particular news, the stock has sold off for five consecutive days and might have finally found a bottom at the all time low of $1.87.
The free-fall in DRL was triggered last week when the FDIC ordered the bank to revise its capital plan after it was discovered that 43% of the assets the bank had been using to calculate its capital ratios no longer can be used for that purpose. This includes tax receivables from the government of Puerto Rico which accounts for more than one-third of the bank’s Tier 1 capital.
The company was then hit by a series of downgrades by Fitch, Moody’s and S&P which rate DRL’s debt as facing imminent or inevitable default.
The stock last traded at $2.71 with a 52-week range of $1.87 to $25.00.
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