Thursday November 6, 2008
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Shares of Wells Fargo & Company (WFC) are falling in after hours trading, after the bank announced that it priced an $11 billion offering at $27 per share. That equates to 407.5 million shares of WFC common stock.

Wells Fargo (WFC) is raising the funds to shore up its capital base, as well as to help it complete its October 3rd announced acquisition of Wachovia, which it is buying for $12.4 billion.
When that deal is completed, Wells Fargo (WFC) will become the fourth largest U.S. bank, with 6,653 branches and $1.4 trillion in assets.

The $27 pricing was a 6.2% discount to Wells Fargo’s (WFC) 11/05/08 closing price of $28.77.

Wells Fargo (WFC) shares are off $1.55 down to $27.22, a 5.39% fall in after hours trading, after shedding $2.91 or 9.19% in regular trading.

Tags: Wells Fargo
 

Wachovia (WB) has ended merger talks with Citigroup (C) and Wells Fargo (WFC) has now made an offer for the company. Should the merger go through, Wachovia (WB) shareholders will receive .1991 shares of Wells Fargo (WFC) for each Wachovia (WB) share they own. Using Wells Fargo’s (WFC) closing price of $35.16 on Tursday 10/02/08, the offer is valued at $7 per share or $15.1 billion. Wachovia (WB) shares closed at $3.91.

Tags: Wachovia  Wells Fargo  Citigroup

The Fannie (FNM) and Freddie (FRE) induced rally seems to be losing steam and some stocks are pulling back. It seems we have another shorting opportunity and traders might want to consider some of the big movers to the upside. Wells Fargo (WFC), Morgan Stanley (MS) and Wachovia Bank (WB) are among the good shorting candidates. Option traders could buy puts in these stocks.

Tags: Fannie Mae  Freddie Mac  Wachovia

With stocks rallying rather sharply yesterday 08/05/08, posting their biggest one day gain in four months, the convincing manner in which stocks moved yesterday could turn out to be a bear trap that’s ensnared investors who got in yesterday afternoon, after they saw stocks hold on and tack on to early gains.

Since May 1st of this year and including yesterday’s rally, there have been eleven days in which the Dow Jones Industrial Average climbed at least 100 points. But for July 16th, when stocks climbed 277 points, and then followed through the next day with a 208 point rally, stocks have given up those triple digit one day gains within the following seven trading days.

Note: stocks gained 186 points on July 30th and we have not given those gains back yet because of yesterday’s rally, plus there is not enough data (trading days) to see if the same would apply.

Financials were big gainers yesterday, with Wachovia (WB) up $1.95 to $19.06, Citigroup (C) up $1.09 to $19.92, AIG (AIG) up $3.20 to $29.89, Wells Fargo up $1.36 to $31.54, Lehman Brothers (LEH) up $2.30 to to 20.24 and Merrill Lynch (MER) up $1.83 to $28.22.

These moves present clear near term shorting opportunities and traders should closely watch these stocks. As soon as the rally mode fizzles, short these stocks. If Lehman Brothers (LEH) stock starts giving back from here, a move to just $18 would be a 10% gain for traders shorting the stock!

On July 14, Lehman Brothers (LEH) was trading at $12.40. Financial stocks rallied from there and on July 18th, LEH was at $19.11. The stock fell to $18.32 by the 21st and then rallied again to $21.10 on the 23rd. It was then downhill from there, with the stock back down to $15.27 by July 28th.

Fast moving traders using the current stock market volatility to their advantage, could see a substantial gain in their portfolio. With AIG down from the $60 range at the start of the year, it probably will end the year down, but one could trade the stock and realize at least a 20% plus gain by December.

Stocks are barely holding on to gains today after yesterday’s incredible run up. There is no doubt that with the decent earnings from Wells Fargo (WFC) yesterday and JP Morgan (JPM) today, some investors with short memories, might have forgotten that we are in a bear market. Bullish traders would like to see a decent follow-up to yesterday’s performance, to confirm a reversal in the downdraft that’s been hitting stocks lately.

The Dow which had been up as much as 112 points today, is now only up about 20 points. The Nasdaq, with disappointing earnings from Ebay weighing on techs, is in and out of positive territory and is now up just 3.57 points, while the S&P 500 is up 2.38 points.

stocksjpmorganwells fargobank stocksjpmwfc

Stocks are are higher less than twenty minutes after it looked like they would be moving down with conviction at the open. There are some positive news to serve as impetus for the move up. Wells Fargo announced the unimaginable, that it is raising its dividend. This is a boon for the financial sector as the news basically affirms that the bank’s cash position must be stable. Even Fannie Mae (FNM) and Freddie Mac (FRE) are up today.

Also, Intel (INTC) announced decent quarterly earnings after market close yesterday, while Sun (JAVA) did even better and pre-announced  that it expects to beat earnings estimate handily. Additionally, crude oil prices continue the  incredible drop from yesterday. At least some very good economic news for Americans. We should see a meaningful drop in gas prices at oil’s current prices.

On the bad news front, the Labor Department reported that consumer prices shot up in June at the second fastest pace in twenty six years, serving to reinforce the fact that inflation is a serious threat to the U.S. economy.

Tags: stocks, investments, finance, lehman, wells fargo, fannie mae, freddie mac

Posted in stocks | Tagged stocks, stock trading