First NBC Bank Holding Company (NASDAQ:FNBC) bounced higher Monday after the Wall Street Journal said the troubled bank was considering a private placement of shares, or in the alternative, a sale.
The stock jumped 13.64% to close Monday at $6.25 on volume of 1.43 million shares.
Technically, the stock has made a tight saucer formation over the last eight daily sessions and may head higher if it is able to penetrate the $6.50 level.
That could trigger covering of at least some of the short sales effected on October 20 or thereafter.
First NBC Bank Holding Company (NASDAQ:FNBC) accuses short sellers
On October 25, First NBC issued a statement in an attempt to soothe market fears after its designation by the Federal Reserve Bank of Atlanta and Louisiana Office of Financial Institutions to be in “troubled condition.”
“First NBC believes it is important to set the record straight and provide accurate information to the marketplace as soon as possible,” the bank said. “The company disagrees with the unfounded assertions in the market and believes those responsible for them may be making these claims to support a short position in FNBC’s stock and benefit from negative news.”
The same day, the Wall Street Journal published a story that claimed an investor betting against the bank’s stock, who also happens to hold its debt, suggested the bank consider a pre-packaged bankruptcy.
Apart from the “troubled condition” designation, First NBC is in hot water with the Federal Deposit Insurance Corporation, the US Securities and Exchange Commission, and is currently without an auditor.
First NBC Bank Holding Company (NASDAQ:FNBC) to sell shares or itself?
Informed persons have apparently told the WSJ that the bank, which hired financial advisors Sandler O’Neill & Partners to help it with a turnaround plan, has received buyout interest from at least three banks. First NBC also thought that a private placement of common stock was viable, those persons said.
A decision, either way, is expected to be announced in the coming weeks.