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Banking, finance, and taxes

Washington Mutual: The Shorts Come Marching In

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By Douglas A. McIntyre Published
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Being in the midst of the sub-prime mortgage crisis has done a lot of harm to a number of lending institutions and some will not make it out alive. Washington Mutual (WM), the big lending operation, will weather the storm, but not without some damage.

The company’s April 17 earnings were ugly. According to The Associated Press: "Kerry Killinger, Washington Mutual’s chairman and chief executive, said the company’s retail banking, card services and commercial groups fared well, while its home loan business — particularly the sub prime segment for consumers with high-risk credit histories — has taken a serious hit."

Investors in mortgage companies simple don’t think it is safe to go back in the water. The short interest in Washington Mutual rose from 29.8 million shares in March to 40.4 million shares in April. But, the shorts may have not made a good bet. After being down as much as 14% this year, the company’s stock price has recovered recently and is only off about 6%.

If the stock moves up more, these shorts could get squeezed.

Douglas A. McIntyre

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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