Banking giant UBS has agreed to acquire the crisis-hit Credit Suisse Group AG for $3.25 billion in a historic deal brokered by the Swiss government. The move is aimed at stopping the stricken bank from triggering a wider international banking crisis. Notably, Credit Suisse is Switzerland's second-largest bank and the world's eighth-largest investment bank.
Reacting to the news, a Twitter user shared ''an important lesson from Credit Suisse.'' He wrote, ''In 2006, Credit Suisse had a market cap of $70B. By 2016, they had a market cap of $30B. By 2022, they had a market cap of $10B. Today, they were acquired for $2B.''
Mr Musk replied to his tweet and wrote, ''Even the mighty can fall if leadership makes bad decisions.'' He said it's hard to believe these days that Apple was months away from bankruptcy before its late co-founder Steve Jobs returned in 1997.
See the tweet here:
After the shutdown of the Silicon Valley Bank, Elon Musk had said that he was ''open to the idea'' of Twitter buying it. Razer CEO Min-Liang Tan suggested that Twitter should consider buying SVB and turning it into a digital bank. Interestingly, Twitter chief Elon Musk responded to his tweet, saying, "I'm open to the idea".
Meanwhile, Swiss government said the deal involving Switzerland's biggest bank taking over the second-largest, was vital to prevent irreparable economic turmoil from spreading throughout the country and beyond.
"It's a historic day in Switzerland, and a day frankly, we hoped, would not come," UBS Chair Colm Kelleher told analysts on a conference call. "I would like to make it clear that while we did not initiate discussions, we believe that this transaction is financially attractive for UBS shareholders," Mr Kelleher added.
Like UBS, Credit Suisse was one of 30 banks around the world deemed to be Global Systemically Important Banks -- of such importance to the international banking system that they are considered too big to fail.
Recently, the US has witnessed two back-to-back bank collapses in a week--first Silicon Valley bank, then Signature Bank. Markets have been riled by the failure of Silicon Valley Bank and fear of a shortage of liquidity as interest rates are raised to fight inflation.
