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Elon Musk’s ‘Diamond’ tweet on Bitcoin revives memories of Rana Kapoor’s YES Bank share sale

Rana Kapoor, the co-founder of YES Bank, had once equated his promoter shares in the bank to Diamonds, only to sell most of the shares a year later, shocking retail shareholders.

May 20, 2021 / 04:15 PM IST
A day after his tweets on September 18, 2018, YES Bank’s share price (Rs 183.45 per piece) rose 10 percent as many shareholders, including gullible retail shareholders, rushed to buy the bank shares.

A day after his tweets on September 18, 2018, YES Bank’s share price (Rs 183.45 per piece) rose 10 percent as many shareholders, including gullible retail shareholders, rushed to buy the bank shares.

On May 19, Tesla Founder Elon Musk tweeted that 'Tesla has diamond hands' using an image, equating the Bitcoin holdings of his firm to diamonds. In other words, the globally renowned businessman was telling the world how much he valued his crypto currency holdings. The tweet went viral on the microblogging platform.

Musk's tweet wasn’t a surprise. Only recently, the Tesla founder had clarified that his company has not sold Bitcoins although the firm’s March quarter earnings showed that Tesla did book some profits by selling part of its holdings. Will Musk keep his promise even after a 30 percent crash in Bitcoin? Only time will tell.

Nevertheless, Musk’s ‘Diamond’ tweet, revived the memories of former YES Bank CEO and founder, Rana Kapoor equating his YES Bank shares as diamonds in September, 2018, only to sell all of it a year later, shocking investors.

Rana Kapoor Tweets

It was on  September 28, 2018 when Rana Kapoor, the then MD and CEO of the bank put out a series of tweets to reassure the investors of the bank about his loyalty and commitment to the promoter shares in the bank. Kapoor and family held 10.66 percent stake in YES Bank at that point, making him the largest shareholder (and promoter) of the mid-sized private bank. Madhu Kapur, wife of later Ashok Kapur, who was the co-founder of YES Bank, held 7.6 percent.


“Diamonds are Forever: My Promoter shares of @YESBANK are invaluable to me,” Kapoor said in one of the tweets. In another tweet, Kapoor said Even after I demit office as MD & CEO of YES BANK, I will never ever sell my @YESBANK shares,” Kapoor had said. In a third tweet, Kapoor further said, “I will eventually bequeath my  @YESBANK  Promoter shares to my 3 daughters and subsequently to their children, with a request in my Will stating not to sell a single share, as Diamonds are Forever!!,” Kapoor said.


These tweets were, presumably, to convince the shareholders of the bank about the promoter’s commitment in the bank and, in some sense, to say that all is well. Kapoor’s tweets were also a dig at the family of Ashok Kapoor who sold some shares in the bank at that point. Madhu Kapur later sold much of her stake in the bank in March, 2020.

Kapoor's tweets were also seen as a confidence building exercise in the backdrop of the Reserve Bank of India (RBI) asking Kapoor to step down as the bank’s chief executive from January 31, 2019 as against the shareholders’ and board’s proposal till September 2021. The private bank had faced RBI action for under-reporting of total bad loans worth Rs 10,531 crore for two consecutive fiscal years – FY16 and FY17. There were clear signs of stress on the books and questions from analyst community on the quality of many credit decisions. Everyone sensed that the RBI knew something that the public didn’t.


A year later, on 19 November, 2019, Kapoor sold almost his entire stake in the bank, post which he held just 900 shares worth less than Rs 60,000 at that point. Kapoor’s holding fell to near zero after holding company YES Capital (India) Pvt Ltd sold 2.04 crore shares worth Rs 142.75 crore. Those were the shares Kapoor described as ‘Diamonds’ just a year ago. Kapoor was later arrested in the YES Bank fraud case.

What did Kapoor's tweet do to YES Bank’s shares?

A day after his tweets on September 18, 2018, YES Bank’s share price (Rs 183.45 per piece) rose 10 percent as many shareholders, including gullible retail shareholders, rushed to buy the bank shares. On October 16 that year, the shares touchepostd a peak of Rs 248.80 apiece or a jump of 36 percent from the day of Rana Kapoor’s commitment on Twitter.

A year later, by the time Kapoor shocked investors by selling nearly his entire holding, shares had already plunged 65 percent over the one-year period and kept falling. The share prices never recovered since then. Today, YES Bank share price is trading at Rs 13.30 per piece, in other words losing 94 percent of the value from the October, 2018 peak.

In 2020 March, YES Bank was rescued by a State Bank of India-led consortium under a reconstruction scheme prepared by the RBI under the guidance of the Government. The banks has regained some ground since then with improving mobilisation of deposits and raising capital through a follow on public offer. YES Bank now has the backing of industry giants. But, as for YES Bank’s old shareholders from the Kapoor era, there has been massive wealth erosion.
Dinesh Unnikrishnan
first published: May 20, 2021 02:48 pm

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