Wachovia Bank’s stock price has been battered like every other financial institution’s over the past few weeks. But things might not be as bad as people think.
William Goodwin snapped up 1 million shares of the company’s stock today. Mr. Goodwin may have some inside knowledge about the financial situation at Wachovia since he is a director at the bank. And analysts are thinking that things aren’t so bad at the North Carolina based firm.
Here’s more, from BloggingStocks.com:
- On Monday, a director at WB bought one million shares for $11.00. This cost him $11 million and could be interpreted as a sign that the stock is probably not going to go away any time soon. However, it is also a good idea to note that the same director bought 500,000 shares last winter at $38, so he may also just be averaging his position downwards. Either way, if you think that the stock won’t fall by too much more in the coming months, then now could be a good time to look at a bullish hedged trade on WB, since the put premiums will be high today.
- WB opened this morning at $10.44. So far today the stock has hit a low of $8.50 and a high of $10.91. As of 12:55, WB is trading at $9.55, down $1.96 (17.0%). The chart for WB looks bearish and S&P gives the stock a 2 STARS (out of 5) sell ranking.
Read the full story here.
Still, the stock has taken a beating and many expect Wachovia to tighten it’s belt, and stop extending credit to everyday customers. While some people might eventually make a bundle off of the stock in the long run, middle America may find it hard to even take out a loan.
Here’s more, from The Morning Call:
- “To the everyday consumer, the problem you have is the extension of credit,” Brew said. “The Wachovias and Bank of Americas have really taken control of the credit card industry. They may not extend more credit. They could cut off your credit if you’re paying late. And with home equity loans, they could cut off your line even if you can pay.
- This ability for the consumer to get credit — it will be more difficult. They may have to pay higher rates, and if they have credit problems, they may not be able to get credit.”
- Wachovia had 49 Lehigh Valley branches and $3.2 billion in local deposits as of June 2007, the most recent data available from the Federal Deposit Insurance Corp. That’s 24 percent of the bank market.
Here’s the full story.
