Stocks of JPMorgan Chase & Co slipped by another 4 % on Thursday amidst reports that the derivatives trade that had bungled for the firm , could run into as much as $9 billion for the beleaguered bank.
The stocks were down the maximum compared to all other banking stocks and it was off further by $1.61 to $35.17 during the afternoon trade, having seen the low of $35.04 in the early trading session. JPMorgan declined to comment on the proceedings.
On May 10, CEO Jamie Dimon had pegged down a loss of $2 billion , warning that the loss could run down to as much as $3 billion. Since then the estimates have not been raised by the firm and in and in a congressional hearing had said that it was expecting the present quarter to be solidly profitable. In three months period, the company usually collects as much as $5 billion in earnings on an average.
With the positions that have been unwound in the last few weeks, the losses are said to be running into much excess of the initial amount of $2 billion.
According to an internal report with the bank in April, the losses had a possibility to climb up to $8-9 billion in worst case scenario. Ever since the trading debacle was made public, JPMorgan has been trying to limit the potential losses.
The guessing game on the magnitude of losses has been a favorite past time on the Wall Street in recent times and obscure credit market indexes, based upon the movements, have estimates running in the tune of $5.9 billion.
In mid-day trading, the stock was trading at $35.16 which is almost a 14 % decline compared to the price on May 10, when the debacle was first made public , with most of the fall having taken place in the first week of the outbreak of the news.
In the second quarter results, that will be made available in July, Dimon has promised to give a detailed report on the situation of the whole issue.