(Bloomberg) — Axos Financial Inc., which has lent on properties including former President Donald Trump’s New York tower, tumbled after Hindenburg Research said it shorted the stock because of the bank’s exposure to problematic commercial real estate loans.
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The company’s shares fell as much as 16% after Hindenburg, the company led by Nate Anderson, said the lender’s share price has an “aggressive” valuation compared to its peers. The decline was the steepest on an intraday basis in more than four years.
Rising interest rates have fueled concerns about the risks of commercial real estate in the US, with values ​​down 21% through April from their peak in March 2022. Axos reported more than $5.9 billion in commercial real estate loans at the end of March well, with multifamily buildings and hotels posing the biggest commercial real estate risks, according to a company presentation.
Although the Hindenburg report makes no mention of Trump, Axos has ties to the billionaire, helping refinance a Trump Tower loan and lending money for a Florida resort. Last month, Trump was found guilty in the first criminal trial of a former US president in the country’s history.
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Axos was down nearly 4% this year through Monday’s close, including a 15% decline since a peak in mid-May.
The bank did not immediately respond to a request for comment outside of normal business hours. Chief Executive Officer Greg Garrabrants said in February that fears of broader banking turmoil were overblown and that the risks were already baked into the share prices of most lenders.
It is not the first time that Axos has attracted attention. Edwin Dorsey’s The Bear Cave published a critical report in November, arguing that the risks to the company were not being appreciated by the market.
Read more: Trump Tower lender calls banks’ fears of unrest in real estate sector exaggerated
–With help from Bre Bradham.
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