Welcome to Extreme Investor Network, where we bring you the latest updates and insights on the world of finance. Today, we are diving into the recent turmoil surrounding Axos Financial Inc., a company that has made headlines for its ties to properties owned by former President Donald Trump.
Shares of Axos Financial took a hit after Hindenburg Research expressed concerns about the bank’s exposure to problematic commercial real estate loans. The stock plunged 4.2% on Tuesday, following a report by Hindenburg that highlighted what they believe to be an “aggressive” valuation of the company compared to its peers. Despite the initial drop, Axos Financial defended itself, stating that the allegations in the report contained inaccuracies and that its commercial real estate specialty lending business operates primarily through fund relationships, providing strong collateral protection.
The commercial real estate sector in the US has been under scrutiny due to rising interest rates, with values dropping significantly in recent months. Axos Financial reported over $5.9 billion in commercial real estate loans at the end of March, with a focus on multifamily buildings and hotels. While the Hindenburg report did not mention Trump specifically, it is worth noting that Axos has ties to the former president, having helped to refinance a Trump Tower loan and providing funding for a Florida resort.
Despite the recent challenges, Axos Financial CEO Greg Garrabrants remains optimistic, stating earlier this year that fears of broader bank turmoil are overdone. The company’s shares are down nearly 8% year to date, but Garrabrants believes that most risks are already priced into the stock.
This is not the first time that Axos Financial has faced criticism. Last November, the Bear Cave published a report raising concerns about the company’s risks that were not being adequately recognized by the market.
At Extreme Investor Network, we keep you informed about the latest developments in the finance world, offering unique insights and analysis to help you make informed investment decisions. Stay tuned for more updates from us as we continue to explore the ever-changing landscape of finance.