RCS Capital Corp (NYSE:RCAP) Crashes Big Time Following a Huge Quarterly Loss

[[tagnumber 0]][[tagnumber 1]]The home page of the official website of RCS Capital Corp (NYSE:RCAP) presents the company as ‘a partner you can trust‘ and, given that selling investment products and services to small and big market players is exactly what this company does, being trustworthy is of paramount importance to both RCAP‘s clients and investors alike. Unfortunately, RCAP‘s dismal chart performance for the last few weeks has pretty much evaporated investors‘ confidence in the stock.[[tagnumber 2]] [[tagnumber 0]][[tagnumber 4]]Even though RCAP‘s market price had been on the decline since last September, it was not until RCAP announced its Q2 2015 financial results that the stock started bleeding like never before. It all started on Aug. 6 following the management‘s announcement of both quarterly earnings and what it called ‘a series of strategic transactions‘ ultimately aimed at increasing shareholder value. For one, RCS could not achieve this through its earnings report because it incurred a hefty net loss of $66 million, a major step down from the net profit of $48 million scored in the same quarter of 2014. As it turned out, the newly planned value–increasing transactions have failed to impress traders, either. And the result is as clear as a bell: over the last four weeks alone, RCAP has not only lost a whopping 70% of its market value, but also hit an all–time low of $1.86 less than a year after reaching a 52–week high of $24.80 per share.[[tagnumber 2]] [[tagnumber 0]]The aforementioned transactions mainly revolve around divestiture as a means of raising much needed cash while cutting costs at the same time. The company even terminated an external management services agreement in order to simplify its corporate governance. Yet, outsiders‘ reaction has remained lukewarm at best, which is why RCAP shares are still losing value even though they are way oversold from a chartist‘s viewpoint.[[tagnumber 2]] [[tagnumber 0]]The gloomy prospects for the remainder of 2015 outlined in the 10–Q does not help to improve RCAP‘s dismal chart rates, either. What is more, an increasing number of Wall Street analysts have already downgraded their outlook on the stock. Until the company‘s most recent manoeuvres to optimize the business actually bear some fruit, RCAP‘s road to a brighter future on the charts seems likely to remain riddled in holes.[[tagnumber 2]]