Posted on 08/22/2011 8:49:32 PM PDT by DeaconBenjamin
Bank of America insists it has more than enough capital, but the market clearly disagrees.
The stock was pounded again today in an up market, dropping 8% to $6.42.
One analyst, Layla Peruzzi of Jefferies, thinks that Bank of America needs to raise an eye-popping $40-$50 billion.
Assuming most of this capital-raise came in the form of equity, the dilution would be severe: The bank's market capitalization is now only $65 billion. And the more the stock falls, the worse the dilution will get.
Of course, if Bank of America does end up needing more capital and suffers huge dilution while raising it, it has only itself to blame.
Three years ago, before the financial crisis, Bank of America's stock was trading above $50, more than 7X today's value. For two years after the financial crisis and disastrous purchase of Countrywide, the stock traded above $15, 2X today's value.
So the company had plenty of time to store acorns for a rough winter.
But despite a near-death experience during the financial crisis two years ago, it never learned.
So now it's back to the denial + death-spiral again.
(Excerpt) Read more at businessinsider.com ...
Piece of cake for the geniuses at BofA.
Gosh, I wonder where they’re going to find 45-50 billion dollars worth of capit-HEY, LET GO OF MY WALLET!!!
Crap, I’m going to get fees up the wazoo, I suppose...
After they take it from your wallet, Obama will make himself CEO.
Is this article discussing Bank of America... or America?
Bank of America should merge with PEMEX and become a Mexican Company. After all, they wanted to be the bank of choice for illegal aliens.
Hey maybe they can raise the fees on current account holders and the ones that stay can pay for the needed money. Oh wait I closed my account because of that, maybe that won’t work for them.
Or better yet raise the size of the bonuses for the CEO who is lowering the value of the stock. No wait they did that two.
I give up maybe we should just get it from the tax payers again.
Hey sell your Property then.
To who?
Bof A had a conservative albeit somewhat inept mortgage culture. Countrywide was the slick; Escalade driving, swindle their grandmother culture.
BofA appears to have had no idea what they were doing.
Maybe they can get some of Obama’s stash...
“To who?”
LMAO,Right, it would have to be Owner financing then!
True. KFI dug up the history of the execs and one of them is a well-known sympathizer for La Raza. That’s why a lot of people withdrew their money from BOA.
I went to Chase in DT LA just to inquire about changing my CC from personal to biz and the bank manager himself came out to talk biz. The only thing missing was that he was going to kiss my behind. This from a harmless inquiry..
I think that language can be found right in their mission statement.
The feds are trying to regulate that as well. No sales without big brother’s approval. As if things were not bad enough.
There are persistent rumors one of China’s “Big Four” banks (the most likely candidate, the Bank of China) or a larger stable bank like JP Morgan Chase is interested in buying a stake in Bank of America.
“The feds are trying to regulate that as well. No sales without big brother’s approval. As if things were not bad enough.”
This out of control monster needs put on a leash!
No more money for the banksters.
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