Bank of America to raise $8 billion, bringing total to over $13 billion
Filed under: Company News
The resurrection of the American banking system must be complete. One of the weakest financial firms in the U.S., Bank of America (BAC), will raise $8 billion at $10 a share.
The stock closed the day at $11.25 and was down as much as 6 percent after hours. The money is in addition to capital it announced it would raise earlier in the month and that brings the total to $13.47 billion. B of A is in the process of closing the gap of $34 billion that the government said it needed after conducting its bank "stress tests."
Banks have been cashing in on the bank rally for weeks. Most recently, several financial firms that were told that they had failed the government stress tests said they would bring in new capital. Several others have said that they will bring in money to pay back TARP funds. The Treasury says it may not take the money back, leaving all involved with the uncomfortable fact that some US banks may actually be over-capitalized.
Bank of America is doing exactly what it should. Over the last three months, its shares are up over 200%. The company would be foolish not to take any money it can get and run.
The by-product of bringing in $8 billion is that it will probably secure the job of B of A CEO Ken Lewis. Investors have been calling for his dismissal since the company bought Merrill Lynch and posted huge losses in the last quarter of 2008. But the stock's price has made everything seem fine -- whether that is true or not -- including Lewis's mistakes.
This story was updated at 6:15 on May 20 when the news was announced.
Douglas A. McIntyre is an editor at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
5-19-2009 @ 9:20PM
LEWIS said...
I HOPE BANK OF AMERICA SHUTS DOWN THERE IS NOTHING AMERICAN ABOUT THIS BANK, I HOPE THEIR BIG WIGS AND CEOS BURN IN HELL FOR RIPING OFF AMERICANS THAT GAVE THEM THE BAIL OUT MONEY.
BURN IN HELL BANK OF MEXICO ALONG WITH CONGRESS OF IDIOTS
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5-19-2009 @ 10:09PM
bt said...
So if they are offering new stock for $9.50 per share, who would pay the current $11.25?
If you own it, sell it now.
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5-19-2009 @ 10:18PM
Iridium said...
The banks and the hedge funds created this bogus rally to jumpstart a huge runup in the price of thier stocks. That way they could issue new stock at a price far higher than they should be able to.
That way they can repay TARP money and come out ahead. This rally has been manipulated from the start and kicked off by a bogus letter of profit. For months the banks have used accounting tricks to show profit where none exists and they were rewarded with 200% swings in thier share price. Instead of going bankrupt the banks stole trillions from American taxpayers and stole billions more through stock manipulation.
All of this to bring back the status quo of the great con. To bring about the end result of the bank owning all. We were so close to bringing the banking system down, to right the wrongs. Instead the government stepped in to save the banks that fund the elections of officials that will look the other way when illegal trades are made.
This system is so corrupt it is amazing to think how easily people are duped into thinking the system works. I think for about 10 minutes in 1776 we had a system free of corruption. After that things went back to the way things have always The corrupt and powerful lie and cheat to steal wealth from the population. Nothing has changed.
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5-19-2009 @ 10:47PM
Denise said...
What they did today is total BS. How is it legal to offer up 825 million share secretly? I am a stock share holder and was never offered an opportunity to buy the 12% reduced stock, my broker didn't even know anything about it. Rumor has it that Goldman Sucks got the stock offering and the chosen few had the opportunity to cash in on the reduced price to make all the money, not the regular Joe. Is it just an accident that Goldman changed the rating yesterday on Bank of America to a "conviction buy", nothing like running up the stock price so you can f*$k the american public. Obama's BS about transpariency is just that, BS. The average person gets to bail them out, have their stock diluted by this secret offering, they have no chance to get in on the offering, and we get to pay higher fees because of "economic conditions". Bend over America, you just got screwed again. I wish someone would explain to me how the hell this is legal. I welcome anyone to explain this to me. When I get the first opportunity to break even on my shares I will sell them and NEVER own another share of BAC as long as I am alive. I will also go tomorrow and close all my accounts at the Communist Bank of America. I am tired of being screwed, America stand up and be heard.
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5-19-2009 @ 10:52PM
Denise said...
Why should someone take the loss because of their dishonest tactics?
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5-20-2009 @ 6:42AM
billy said...
stop complaining an enjoy the ride. stocks going up isnt that what you want?
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5-20-2009 @ 7:42AM
Ajulejo emmanuel said...
i like you obama and you are really trying your best....but keep on like these
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