How close is Wachovia to becoming the next WM?

The key point is:

Citigroup and Wells Fargo are unlikely to bid more than a few dollars for share for Wachovia, whose shares closed Friday at $10, the newspaper said. It is unclear whether Wachovia would be sold as a whole or be broken up, or how much Wachovia bondholders might lose in any transaction, it said.

Given the JPM/WM bailout model, the stronger banks (like JPM, BAC, WFC) know that the FDIC will swoop to shut down the bigger dodgy banks, because they don't want to drain the FDIC fund.

So when C and WFC are said to be in a bidding war, it's a war over paying $2 or $3, as opposed to $12 or $13.

 

My quotes show that WB traded as low as $3.10 pre-market today.

 

Of course, it's the speculators, with their heavy short positions, driving down the stock.

 

Any company in any sector whose shares were trading at $50... drive down to trading at $3 and change is history.

Citi is buying their banking operations.

 

Anyone know why WB is down so much given the bailout is here. Could it be a buy?

 

now $2.20 .. now 1.90 as i finished typing out the text below

Its not a bail out - its a buy-in.

The banks will have to bear any future losses from the "assets" they hand over to the FED.

 

$1.80 now...sure looks like the next WM!

 

Citi to acquire WB banking assets in FDIC-facilitated deal

09/29/2008 08:20 *DJ Citi To Bear First $42B In Losses On $312B In Wachovia Loans

09/29/2008 08:20 *DJ FDIC Sees No Cost To Deposit Insurance Fund >C WB

09/29/2008 08:20 *DJ Citigroup To Acquire Wachovia On Open-Bank Basis - FDIC >C

 

FDIC says WB didn't fail. What does that mean?

 

It means deposits above $100k wont take a loss and it wont cost the FDIC insurance fund a dime.