A little over a month after disclosing a bad trade that resulted in $2 billion in losses, JPMorgan has divested itself of the majority of its position, leading its stock price higher.
Just after its chief executive officer testified before Congressional panels, JPMorgan Chase & Co.’s stock was on its way up Wednesday as the company announced it sold off most of its position that caused the company to lose at least $2 billion.
According to CNBC, JPMorgan has divested itself of almost 70% of its holdings in the CDX IG 9 index, which played a major role in the estimated $2 billion in losses that the company acknowledged on May 10.
CEO Jamie Dimon had been testifying before Congressional panels about the incident, where he maintained the loss was an isolated incident. Since the losses were made public, JPMorgan’s shares had fallen more than 11%. However, news that the company had sold off more than 65% of the trade sent shares back up on Wednesday.
In an effort to make exiting the losing positions smoother, JPMorgan has concealed the exact details of the trade. Dimon also told Congress that the company should be solidly profitable in the second quarter.
Back in May, however, the bank had said that the unit that houses the Chief Investment Office — where the trades were made out of — will sustain $800 million in second-quarter losses instead of the initially estimated $200 million profit.
JPMorgan’s stock climbed steadily throughout the morning, up by as much as 4.15% over the previous day’s close. However, the stock took a slight downturn, as did much of the market, while Fed Chairman Ben Bernanke didn’t offer any surprises when he met the press on Wednesday afternoon.
The stock closed up 3.02% at $36.45 on Wednesday.
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