Banking, finance, and taxes
FAS/FAZ Dealing With Billions of Dollars of Securities Sales from Members (FAS, FAZ, BBT, COF, PFG, WFC, USB)
Published:
Last Updated:
The triple leverage ETF’s, the Direxion Financial Bull 3X Shares (NYSE: FAS) and Direxion Financial Bear 3X Shares (NYSE: FAZ), are perhaps the most volatile of all financial-stock ETF’s. This morning they are getting to deal with a wave of secondary offerings and capital offerings from constituent member banks and financial firms. These ETF’s are reacting to major “raising cash” filings and offerings from BB&T Corp. (NYSE: BBT), Capital One Financial Corp. (NYSE: COF), Principal Financial Group Inc. (NYSE: PFG), Wells Fargo & Co. (NYSE: WFC), and US Bancorp (NYSE: USB).
BB&T Corp. (NYSE: BBT) plans to repay its TARP obligations as well. The trust bank has filed to sell about $1.5 billion in new stock, and plans to cutting its dividend by 68% to $0.15 to preserve cash in lower earnings. BB&T shares are down almost 5% at $25.00 after the open.
Capital One Financial Corp. (NYSE: COF) sold 56 million shares of common stock at $27.75 to pay back TARP funds. This comes on the heels that the stress test showed the bank did not need to raise funds. Shares were down 11% after the open at $27.78.
Principal Financial Group Inc. (NYSE: PFG) was not one of the stress test institutions and is more of an insurance and asset manager than anything else. But it is raising close to $1 billion via a sale of 42.25 million shares of common stock. Shares are down 8% at $21.61 after the open.
Wells Fargo & Co. (NYSE: WFC) filed to sell 341 million shares of common stock to raise more than $7 billion (and more than $8 billion if overallotment comes in) and the use of proceeds is “for general corporate purposes.” Because Raymond James upgraded the stock, its shares are “only down 2%’ at $27.56 shortly after the open.
US Bancorp (NYSE: USB) has filed to sell up to $2.5 billion in private capital via a common stock sale for TARP repayment more than anything.
As a result of all of these financials lower on offerings and after seeing profit taking in other major financial firms, we have the Direxion Financial Bull 3X Shares (FAS) down 9.8% at $11.32 and the Direxion Financial Bear 3X Shares (FAZ) up 8.9% at $4.90 at 9:47 AM EST.
JON C. OGG
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
