After a report that Western Alliance Bank is looking into strategic options, including a sale, emerged on Thursday, May 4th, the lender’s shares dropped by as much as 40%. Not long after, the company published a press release denying there was any truth to the news and called the article “shameful and irresponsible”.

Western Alliance Shares Recover After The Bank Denied It Is Exploring Strategic Options

The shares of Western Alliance Bankcorp declined significantly after a report on Thursday indicated the lender has hired advisers to explore strategic options, including a possible sale. Several hours later, the company itself published a press release denying there was any truth to the news and described the initial report as “shameful and irresponsible”.

There is not a single element of the article that is true. Western Alliance is not exploring a sale, nor has it hired an advisor to explore strategic options. It is shameful and irresponsible that the Financial Times has allowed itself to be used as an instrument of short sellers and as a conduit for spreading false narratives about a financially sound and profitable bank.

Western Alliance also indicated it is exploring legal options as a response to the report. The initial article had a severe negative effect on the lender’s stock, but the press release managed to temporarily stabilize the situation. Despite the effort, the share price was more than 35% in the read at the time of writing.

The news had a dramatic effect as the US regional bank crisis, which originally started in early March, was recently reignited by the sale of First Republic to JP Morgan. A similar report from Wednesday afternoon sent the shares of PacWest Bank falling more than 50% in after-hours trading.

Regional Bank Stocks Tumble as Crisis of Confidence Reignites

In recent months, regional banks in the US have been experiencing strong sell pressure. The turmoil started in early March as three lenders either announced voluntary liquidation or were seized by the regulators. The crisis prompted the authorities to implement emergency measures to stabilize the situation and caused several major banks to make emergency deposits to smaller lenders like the now-sold First Republic.

While the situation somewhat stabilized, the crisis of confidence was reignited at the beginning of this week causing multiple mid-sized lenders’ shares to drop significantly, Along with PacWest and Western Alliance, First Horizon experienced a significant drop in Thursday trading after it was announced that its merger agreement with Toronto-Dominion Bank was terminated.

While both banks claim that the decision was not caused by the ongoing crisis, but rather by a lengthy back-and-forth that caused the merger to become unfeasible, investors proved nervous about the development. The shares of First Horizon were down more than 32% at the time of writing.

This article originally appeared on The Tokenist