Ever since the collapse of Silicon Valley Bank earlier this month, investors have been asking an important question: Which will be the next bank to fall? This focus has cast a dark shadow over many regional banks that operate under a business model similar to SVB. Institutions such as First Republic Bank (NYSE:FRC) and Western Alliance (NYSE:WAL) have been seen as likely candidates. But today, a new bank has entered the mix. Metropolitan Commercial Bank (NYSE:MCB) has spent the day trending steadily downward, and investors are taking notice. As of this writing, MCB stock is down 28% for the day and showing no signs of slowing down. This has caused some investors to speculate that it may be on its way to hitting the bottom and landing next to SVB.
How likely is it that Metropolitan Bank will be the next casualty of the 2023 banking crisis? Let’s take a look at the company and the forces pushing it down today.
The Problems Facing MCB Stock
Metropolitan Bank hasn’t reported any negative catalysts that might push shares down. This suggests that its unexplained declines are driven by one thing: a fear among investors that it will be the next bank to collapse. Speculation regarding MCB stock is rising on Twitter, primarily driven by a trading account called Eliant Capital. Earlier today, its owner tweeted the following, sharing a link to a Substack blog post on the company:
$MCB has many issues, great writeup below 👇 https://t.co/cvHx9w5GL9
— Eliant Capital (@eliant_capital) March 30, 2023
Since then, Eliant Capital has retweeted and commented on many posts making the case against MCB stock as it has fallen. In one, the author notes the number of Metropolitan Bank insiders who offloaded large amounts of shares earlier in the month.
One important aspect that the report shared by Eliant highlights, though, is the bank’s strong ties to the crypto industry. It calls attention to the bank’s history of issuing prepaid debit cards for crypto firms. In 2018, for example, MCB teamed up with Crypto.com to launch the MCO Visa card.
The report lays out plenty of other troubling aspects of Metropolitan Commercial Bank, but it’s impossible to ignore its crypto market links. These heavy ties to a troubled industry helped take down Signature Bank (OTCMKTS:SBNY) after regulators deemed it a “systemic risk.” If an investigation into MCB ensues, it could easily be the next bank to fall.
On the date of publication, Samuel O’Brient did not hold (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.
