Bank Mergers

Discussion in 'Trading' started by newtoet, Jan 24, 2004.

  1. newtoet


    I was listening to Cramer and Kudlow babble last night, and Cramer said his sources told him that several bank mergers are likely in the next few weeks.

    So (Cramer being an idiot aside) does anyone have any ideas about probable mergers that would present good trading opportunities?
  2. There was chatter this week about WM being a target, possibly of WFC.
  3. Kramer called the JPM/ONE merger the week before.
  4. I think it's easier to make money once they are annouced. This is true because there's no guarantee the merger will be at a premium, and even if it is, the acquirer's stock may drop so much, the premium disappears.
  5. Mecro


    Yeah it's called inside information. I'm sure rumors about this have been floating around for several months among the institutions.

    The JP Morgan acquisition by Chase was a disaster itself and even after 2 years they were still having serious problems. Many of JP Morgan's more speculative activities turned to disaster in 2000 and 2001, but was kept quiet. Besides that, their IT departments went through such turmoil that definitely cost them money and retail customers. Also there was the culture clash which resulted in management personel spending most of the time battling each other instead of doing actual work.

    It's really not suprising that JP Morgan Chase getting "merged" in by BoA. Who knows what Chase's real financial situation is. All I know is that a big company like that would never declare financial distress or BK. The answer nowdays seems to be mergers and acquisitions. More money for the IBs this way.

    I think Citibank will be the next one to acquire/merge someone else. They are a solid financial institution and will need to keep up with BoA. They will probably suck up a 4th or 5th tier bank, depending on who has more financial distress so that they will put up no struggle.

    It's really such bullshit when you think about it.