If Bank Analyst Is Right About Bank Of America (BAC) And Wells Fargo (WFC) No One Seems To Care

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By Douglas A. McIntyre Updated Published
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Cammonopoly_wideweb__430x3250A leading bank analyst is certain that Wells Fargo (WFC) and Bank of America (BAC) are going to have to raise more money. No one seems to be listening. Both stocks are flat to up today.

Suppose that Richard Staite of Atlantic Equities is right.

According to Reuters, Analyst Staite of Atlantic Equities downgraded Bank of America to "underweight" from "neutral" and Wells Fargo to "neutral" from "overweight." He believes that each firm will have to raise $10 billion to $15 billion.

Having to come up with that kind of money could be remarkably expensive for current shareholders. Bank of America’s market cap is $77 billion with a stock price of $17. Bringing in a huge sum of capital may have to be done below market and with warrant coverage. That would drive dilution of over 20% making BAC a $12 stock.

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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