Banking, finance, and taxes
B of A: When Your Stock Breaks Under Offering Price (BAC, JPM, MER)
Published:
Last Updated:
Bank of America Corp. (NYSE: BAC) is being taken to the cleaners this morning. Shares closed down sharply yesterday at $23.77 after closing at $32.22 just the day before. Bank of America raised right at $10 billion via a security sale of common stock to the tune of 455 million shares at $22.00 per share. Yet shares are trading well under the pricing level.
Bank of America itself and Merrill Lynch (soon to be B of A) underwrotethe offering. What is interesting is that shares are down 16% at$19.71 in pre-market trading with about 30 minutes to the open.
It seems that there is pressure as JPMorgan Chase (NYSE: JPM) stillwants $5 billion in a collateral payment from Merrill Lynch (NYSE:MER). There could be concerns that B of A will be on the hook forthose funds. JPMorgan wants what it feels belongs to it, and MerrillLynch believes it has put up enough collateral.
In a side note, Keefe Bruyette & Woods, or KBW, upgraded thisstock on valuations. The new rating is still only a "Market Perform." Its research is generally given a better reception than this, butconvincing someone about "value" right now is like preaching to thedeaf.
Bank of America’s stock has had a trading range of $18.44 to $52.96 over the last 52-weeks.
Jon C. Ogg
October 8, 2008
Essential Tips for Investing (Sponsored)
A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
