Bank Of America Stock Price
August 9, 2011 by staff
Bank Of America Stock Price, Financial companies directly affected by the bloodbath in the markets Monday, with Bank of America leading the sell-off as to renewed fears about their financial soundness.
Shares in banking giant fell 20.3 percent to 6.51 and a share Monday, its lowest level in over two years. Credit default swaps linked to the Bank of the U.S. debt reached its highest level since mid-2009, indicating additional pressure on the company. Its shares have fallen 50 percent this year.
Other financial firms were also hit hard in the general decline in the markets. Financial results were worse than the 10 sectors of 500 shares of Standard & Poor index, falling nearly 10 percent on the day.
However, Bank of America, in particular, had to deal with several problems including a new demand linked to mortgage lending problems.
On Monday, American International Group, sued Bank of America looking more and $ 10 million in damages. The government rescued AIG during the 2008 financial crisis, accusing the bank and acquired several companies such as Merrill Lynch and Countrywide Financial, to misrepresent the quality of the mortgages that entered the grouped values.
(Bank of America is not only possible target of AIG. Goldman Sachs, JPMorgan Chase and Deutsche Bank to receive complaints as well.)
In addition, a well-regarded bankinganlyst, Mike Mayo of CLSA, on Monday lowered Bank of America to pay less to overcome. Among the reasons cited in a note the concern that the company may need to embark on a new round of capital raising.
“Solving the mortgage problems will take much longer and can actually be much higher than estimates from the administration, collection
Questions about the company’s ability to meet regulatory capital requirements at the right time, “he wrote.
A spokesman for Bank of America, Jerry Dubrowski declined to comment on the price of the company. However, he said in a telephone interview Monday that the company believed it had sufficient capital and does not need to raise more.
“It is indisputable that the company is in a stronger position today than a year or even two years ago,” he said, pointing to the bank’s capital ratios and profit improvement that five of its six main business lines published in the second quarter of this year.
Banks in the U.S. this year is likely that the revenue growth I’ve experienced worse since 1938. However, Bank of America, in particular, has lagged rivals in improving the quality of its loan portfolio, while potentially facing steeper payments including claims for mortgage securities.
Meanwhile, a Bank of supporters U.S. Open has apparently retired. Appaloosa Management, the big hedge fund run by David Tepper, sold more than 41 percent of its stake in the company during the second quarter, according to a regulatory filing Monday. That now has about 10 million shares.
Move Tepper seems born of an effort to reduce the exposure of banks Appaloosa as a whole, which also sold off chunks of its holdings in Wells Fargo and Citigroup in the quarter.
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