BAC could be foreced to raise $50 BILLION!!! WOW!!

Discussion in 'Wall St. News' started by S2007S, Aug 22, 2011.

  1. S2007S

    S2007S

    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 today’s 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.

    “Our 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,” Peruzzi wrote, as first reported by Christopher Dietrich of Dow Jones. “The math they came to get BAC to Basel I T1C in line with C they need about $40-$50bn.”

    Bank of America has said repeatedly that it does not need to raise capital, but the market doesn’t appear to be buying it. The stock is trading at one-third book value.
     
  2. sheda

    sheda

    BILLIONS AN BILLIONS of dollars!!

    First firm I have ever heard of using shares to raise money, darn it some things up here!
     
  3. Peanuts.

    [​IMG]

    :cool:
     
  4. Illum

    Illum

    lol 50 billion, run don't walk

    ""A $50 billion equity raise at today’s 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.""

    Yea ok... 2 to1, well....by today's prices anyway, get back to us tomorrow.
     
  5. S2007S

    S2007S



    Peanuts, meaning that they are going to need tens of billions more than the $50 billion they think they are going to need?
     
  6. maybe GS will lend them the money after blankfine goes to jail
     
  7. Illum

    Illum

    "These people ran a great company into the ground" A strange orange man told the Cayman Islands Gazette
     
  8. sprstpd

    sprstpd

    Just have the Fed print them the money. That should be the solution to all of our problems as it is working so well.