WaMu now $5.75 a share
Posted June 11th, 2008 by theStockMasters...
For lack of a better Internets abbreviated slang phrase, OMG, Washington Mutual (NYSE:WM) shares are either too cheap or too scary to buy, more like a little of both. Shares of WaMu are trying to get above $6 a share, so what's next?
Just for fun, let's see how much money is now gone thanks to WM shares falling off the earth:
| WaMu House of Pain | |||
| No of Outstanding Shares | Date | Share Price | Total Market Cap |
| 1,050,000,000 | 6/9/2007 | $ 42.40 | $ 44,520,000,000.00 |
| 1,050,000,000 | 6/11/2008 | $ 5.75 | $ 6,037,500,000.00 |
| Loss in just one year | $ (38,482,500,000.00) | ||
Nice work WaMu, only a 86% drop in share price in one year. Here's how you fix that.
1. Fire CEO Kerry Killinger. Dude has to go, you can't restore faith in Washington Mutual by changing the name to 'WaMu' or creating some other lame advertising that distracts shareholders for 5 seconds:
Feel the Whoo hoo!™
Change it up to be...
Feel the $38 Billion Whoo hoo Loss!!!™
2. Sell the Company to anyone that will buy it. Time to let go, put WM up for sale, instant 30% rise in share price. Citigroup and HSBC put in your bids, this savings and loan could sell for next to nothing thanks to the massive decline. If Bear Stearns went for $2 a share, WaMu could go for $1.50, why not?
3. WaMu is beyond any help that will come from 'Restructuring' or a new 'Synergy', the top dogs running Washington Mutual blew it, it's over. Time to go, let the bank tellers run the company, they could do a better job. Layoffs, closing branches, cutting the Dividend, there's nothing left to do but fire 80% of the current staff and run the entire operation from India. Come on, Killinger, time for you to go.
4. 18% Short Interest and Growing everyday. WM shares are doomed, again, refer the picture above. Killinger, kudos. Fire the senior management and give control over the shareholders, they deserve it.
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WaMu denies regulatory move rumors as shares fall
http://www.forbes.com/reuters/feeds/reuters/2008/06/11/2008-06-11T213358Z_01_N11350454_RTRIDST_0_WAMU-UPDATE-2.html
Washington Mutual Inc (nyse: WM - news - people ) Wednesday denied what it called market rumors about regulatory activity after the shares fell more than 9 percent to a 16-year low.
"Neither our primary federal regulator, the OTS, nor any other bank regulatory agency has taken any enforcement action against WaMu that we have not previously discussed," the largest U.S. savings and loan said in a statement.
The origin of the rumors was unclear, although Wamu has been hit by concern about losses on the bank's loan portfolio.
Wamu, down 55 percent this year, is the worst performer among big U.S. bank stocks after Nat City, which has plunged 73 percent.
Earlier, analysts and investors attributed the drop in Wamu shares to ongoing concerns about loan losses.
"Finally you are starting to see some analysts really crunch the numbers on this story, and large institutional investors are out there believing it," said Les Childress, president of Childress Investment Research. "Everyone seems to be in the same direction, that the losses are going to be extensive."
The company's shares fell 62 cents, or 9.3 percent, to close at $6.06 on the New York Stock Exchange, their lowest close since January 1992. The stock was the biggest decliner on the KBW banks index.
"The company has said they will have some significant losses, and at the end of the day, no one knows how big those losses will be," said Blake Howells, director of equity research at Becker Capital Management in Portland, Oregon, with about $2.3 bln under management. "It makes Washington Mutual hard to value."
Becker does not own Wamu shares.
UBS (nyse: UBS - news - people ) AG analyst Eric Wasserstrom predicted earlier this week that WaMu could face losses of $27 billion in all asset classes through 2011.
Wasserstrom had widened his full-year loss estimate for the thrift to $4.45 per share from $4 and cut his share-price target to $8.50 from $11.
The forecast came after WaMu reported a first-quarter loss of $1.1 billion, triggered by its exposure to subprime mortgages, and sold a $7 billion stake to investors led by TPG Capital.
In the capital plan, WaMu raised $1.54 billion from a sale of 176 million shares at $8.75 each. It also sold $5.5 billion of convertible preferred shares with an initial conversion price of $8.75.
WaMu said this month it would strip Chief Executive Kerry Killinger of his title of chairman. For several months, shareholder activists had taken aim at Killinger and board members for not protecting the company from crippling losses.
The latest sell-off -- WaMu's shares are down about 18 percent this week -- may be a further indication of shareholders' frustration, Childress said.