This news is going to hurt bank stocks again, what seems to be a rumor is now looking to be the real thing, that BAC will need to raise BILLIONS AN BILLIONS of dollars! And everyone thought the financial crisis was over a few years back, as I said this is just the beginning of this financial crisis.
August 22, 2011, 3:54 PM ET
Bank of America Could be Forced to Raise $50 Billion: Analyst
By Avi Salzman
Bank of America (BAC) could be forced to raise between $40 billion and $50 billion in capital, Jefferies analyst Layla Peruzzi wrote today, and the longer the company waits the more the move will cost. Bank of America shares have slid 6.9% today to $6.49 per share.
A $50 billion equity raise at todayâs prices would mean the bank would have to issue as many as 7.6 billion more shares, significantly diluting its current shareholders. The bank had 10.13 billion shares outstanding as of the end of the second quarter.
âOur traders and desk strategist think the reality is that the market is forcing BAC into a capital raise and the lower stock price goes, the worse it gets,â Peruzzi wrote, as first reported by Christopher Dietrich of Dow Jones. âThe math they came to get BAC to Basel I T1C in line with C they need about $40-$50bn.â
Bank of America has said repeatedly that it does not need to raise capital, but the market doesnât appear to be buying it. The stock is trading at one-third book value.
August 22, 2011, 3:54 PM ET
Bank of America Could be Forced to Raise $50 Billion: Analyst
By Avi Salzman
Bank of America (BAC) could be forced to raise between $40 billion and $50 billion in capital, Jefferies analyst Layla Peruzzi wrote today, and the longer the company waits the more the move will cost. Bank of America shares have slid 6.9% today to $6.49 per share.
A $50 billion equity raise at todayâs prices would mean the bank would have to issue as many as 7.6 billion more shares, significantly diluting its current shareholders. The bank had 10.13 billion shares outstanding as of the end of the second quarter.
âOur traders and desk strategist think the reality is that the market is forcing BAC into a capital raise and the lower stock price goes, the worse it gets,â Peruzzi wrote, as first reported by Christopher Dietrich of Dow Jones. âThe math they came to get BAC to Basel I T1C in line with C they need about $40-$50bn.â
Bank of America has said repeatedly that it does not need to raise capital, but the market doesnât appear to be buying it. The stock is trading at one-third book value.
