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Miami-based Mercantil Bank’s stock bounces 500 percent amid possible sale speculation

Mercantil Bank is traded on the NASDAQ exchange.
Mercantil Bank is traded on the NASDAQ exchange. AP

It was a rollercoaster week for Mercantil Bank’s stock price.

On Aug. 31, the Coral Gables-based bank’s stock was selling at $9 on the NASDAQ exchange. Just a few days later, on Sept. 4, the price spiked to $58.

But the peak only lasted a day. The stock plummeted back down to $14 on Friday.

Kenneth H. Thomas, a Miami banking analyst and president of Community Development Fund Advisors, chalks it up to sale speculation. There aren’t many medium-sized banks left to sell, he said. A rumored sales of Mercantil, which reported $8 billion in assets in 2017, would surely be a reason for a spike of this magnitude.

“Rumors like these often cause price anomalies,” he said. “But I think from now on it will be relatively stable until the rumor mill starts churning again.”

A representative from Mercantil was not immediately available for comment.

Thomas said South Florida is an especially prime area for banking. Bank stocks worth $10 in a smaller market like Kansas City, Missouri, would be worth $40 to $50 in South Florida, he said. The area’s three counties — Broward, Miami-Dade and Palm Beach — hold 40 percent of the wealth in Florida. Florida is the third largest state in the country. Those factors add up, he says.

“We’re one of the best markets in the country for International banking, foreign money and wealth management because all of the money is here,” he said.

Earlier this year, Mercantil had a “spin off,” meaning it sold off the majority of its shares — 80 percent — to the public. Before then, Venezuelan investors were majority owners.

“The U.S. government was not unhappy that a Florida-based bank is owned by U.S. stockholders now,” said Thomas.

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