Wamu’s Wild Ride
June 10th, 2008
It’s been a rollercoaster ride these days for Washington Mutual shareholders. Yesterday the stock fell 17% to a 16 year low as UBS analyst Eric E. Wasserstrom predicted losses of over $27 billion by 2011, more than twice company estimates. Ratings firms had also downgraded a bunch of mortgage securities, sending all financial stocks down lower.
Today Wamu is up more than 11%, most likely because of Fed Chief Ben Bernanke’s comments yesterday that were reported this morning. Bernanke said high energy prices would likely lead to more inflation and the Fed would “strongly resist” that happening.
Last week Wamu ceo Kerry Killinger narrowly managed to hang on to his job, although the board brought in a new chairman. Could something else be afoot? A takeover perhaps? JP Morgan has long been rumored as a potential suitor. Even with the recent bounce, Wamu with its huge branch network, is valued at just $7 billion. I’m not saying I know anything more than that.
Entry Filed under: News
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