Why Is Deutsche Bank (DB) Stock Down Today?

Deutsche Bank (NYSE:DB) stock is down 1% today on news that an unknown investor has sold a massive stake in the European bank.

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Media reports claim that an unnamed investor has sold 116 million shares of DB stock, a massive trade that has sent Deutsche Bank’s share price sharply lower.

Prior to today’s decline, the German lender’s stock had been down 6% year to date at right around $12 per share.

What Happened With DB Stock

European stock markets are roiling today on news of the big sale in Deutsche Bank stock, as well as a 72.5 million share sale in fellow German lender Commerzbank (OTCMKTS:CRZBY). The sales represent more than 5% of the outstanding shares of the two German banks. Commerzbank stock is down 9% on the day in Germany following disclosure of the huge sale, which appears to have happened all at once.

The Euro Stoxx 600 index is down 0.4%, with the German DAX down 0.5% following reports of the stock sale in Germany’s two biggest banks. It is not immediately clear who the investor is that sold the massive stakes in Deutsche Bank and Commerzbank, or what prompted the sale.

Why It Matters

Global stock markets remain on tenterhooks and have been broadly sinking in recent days as investors try to come to terms with record inflation, rising interest rates, the Russian invasion of Ukraine, a resurgence of Covid-19 in China, and oil prices that continue to seesaw up and down.

In Europe, markets are particularly jittery as Russia’s invasion of Ukraine appears to be escalating. News of the big sale of stock in Germany’s two largest banks is shocking and adds to the uncertainty that is prompting investors to sell. Germany is Europe’s biggest economy and Deutsche Bank is the country’s biggest lender, with exposure throughout the continent.

European Central Bank policymakers are scheduled to meet in Frankfurt, Germany later this week (April 14) to discuss their next monetary policy move and face the difficult balancing act of weighing surging consumer prices against downward pressure on economic growth due to the war in Ukraine.

What’s Next for Deutsche Bank

It’s a bad day to be a shareholder of Deutsche Bank or Commerzbank. Shares of the two lenders look destined to fall further in the short term. Longer term, it will be interesting to know who sold the huge stakes in the two banks and why. In the meantime, European markets look likely to continue trending lower as they struggle to digest news of the share sale and its broader implications for the market.

On the date of publication, Joel Baglole 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.

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.


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