Bank of America (NYSE: BAC) CEO Ken Lewis has based what is left of his reputation on the fact that the firm does not need another dime in government money. As a matter of fact, he regrets taking as much TARP cash as he did.
According to Bloomberg, Oppenheimer & Co. believes that "Bank of America Corp., the largest U.S. bank, needs to raise $36.6 billion in equity to bring capital ratios in line with its peers." In this environment, that money is not going to come from the private sector. The only entity with the stones to put it up is the U.S. government.
While the money may not come in exchange for common stock, any instrument is likely to have some conversion provisions, which means that dilution is possible. With a market cap of $44 billion, current Bank of America shareholders will be facing a large haircut if Oppenheimer is right. The stock trades at $7.
Douglas A. McIntyre is an editor at 24/7 Wall St.











Reader Comments (Page 1 of 1)
4-09-2009 @ 7:51AM
John Huckleberry said...
I wonder who is short selling for this story to have been written? It's a piece of fluff writing meant to cause a sell off today. I'm not buying the fluff. As a matter of fact I openned Bank of America accounts for the first time ever this week. Why? Because I know most stories released now a days are put out to sway the market one way or the other. I don't sway easily.
4-09-2009 @ 8:16AM
ij70 said...
@ John Huckleberry, agent-provocateur.
My credit union has better interest rates then BOA, no way am I going to give my money to BOA you tool.
4-09-2009 @ 8:32AM
fmaccou said...
How many CEO's do you know are one on one with the operations of their company, I can tell you right now, NONE. This been happening over and over again and again.
Ken took money from the gov't before shutting to hell up about it, he acted like the company don't need it. The second wave of foreclosure's are coming down the pike to his mansion, and he can't tell me none of his directors did not mention it to him.
CEO's continue to be out of touch what this DEPRESSION is all about. Yes, I said it DEPRESSION. You heard it here first!!!.
Ken will find himself out of his job and at a soup kitchen if don't stop spreading his crap around.
4-09-2009 @ 8:45AM
Donovan said...
I'm sure BOA will do just fine, considering BOA just sent out notices to thousands and thousands of their credit card holders, amending their credit card APR interest rates to 25.99% the amended APR rate change will take affect on card holders May 2009 billing statements. If you elect to opt out in order to retain your current rate of interest. Your account will NOT be closed. How ever, If you use your credit card any time after choosing to opt out. This will automatically cancel your opt out option lower APR locked rate. And change the rate to a 25.99% APR.
4-09-2009 @ 9:04AM
Shelly said...
What these banks are doing by amending consumers credit card interest rates, and contract terms. Is pure consumer extortion.
Consumers need to start filing lawsuits against banks/lenders who are now using this tactic to unjustly increase their private business revenue. If as a consumer, have not defaulted on your credit card payments. Their is NO legal reason for you as a consumer to be subjected to an excessive increase in your credit card APR interest rate.
4-09-2009 @ 9:42AM
D said...
No wonder Geithner pushed back all the banks financial stress test results in excess of 30 days. It appears our Government officials have all been bought, and paid off by the banks.
4-09-2009 @ 4:47PM
tpotter601 said...
First of all credit cards are "open credit" and the initial terms include the ability to amend the credit costs if the customer's financial situation changes, say as a result of credit bureau score deterioration. The consumer can simply not accept the "new terms", close the account and pay it out over time under the original terms. How's that extortion? Give me a break.
4-10-2009 @ 5:35AM
bbroders said...
Read the analyst piece....6% TCE/RWA
what a joke he didnt say but most BIG
banks would have to capital raise...using
the average for the top 25 banks is ridiculous.....comparing apples to oranges
do some investigative work before you report....
4-10-2009 @ 8:55AM
fmaccou said...
How many CEO's do you know are one on one with the operations of their company, I can tell you right now, NONE. This been happening over and over again and again.
Ken took money from the gov't before shutting to hell up about it, he acted like the company don't need it. The second wave of foreclosure's are coming down the pike to his mansion, and he can't tell me none of his directors did not mention it to him.
CEO's continue to be out of touch what this DEPRESSION is all about. Yes, I said it DEPRESSION. You heard it here first!!!.
Ken will find himself out of his job and at a soup kitchen if don't stop spreading his crap around.
4-10-2009 @ 11:38AM
Bob Rinaldi said...
short seller shit, doug
where's bac trading at???
notice some commenters are
beginning to be good crapsorters, doug