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Daily Blog: Scouting the Internet and World at large
Here you will find short blurbs about interesting articles and buzz worthy rumors related to technology, business, or regional topics for the North Carolina and Charlotte area. This section is by no means published daily but the content is updated much more frequently.
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Credit crunch hobbles Wachovia, seeks $7B injection |
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Written by Brian Austin
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Monday, 14 April 2008 |
 Wachovia stated that it would raise $7 billion in capital by issuing common and preferred stock. The company has hemorrhaged cash since the ill fated purchase of California mortgage lender Golden West at the height of the real estate bubble in 2006.
Obviously the purchase of Golden West was a mistake, one which Wachovia must live with for some time. The unfortunate matter is that the current bear market combined with deteriorating credit conditions mean that the company must float more stock in order to cover costs. This is extremely unfortunate for shareholders as it both dilutes their holdings in addition to battering the share price.
Wachovia Sinks on Loss, Plans to Raise $7B
Wachovia shares sank as much as 11% Monday, after the bank said it was raising $7 billion through a stock offering and cutting its dividend, while swinging to a big first-quarter loss.
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Wachovia said the proceeds from the sale of common and preferred stock would be used for general corporate purposes. The bank said the money will increase capital ratios and provide flexibility. CEO Ken Thompson said in a company press release that he was "extremely pleased" with the level of interest from investors so far.
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