It seems curious at first when a bank reports losses of $9B, as Wachovia (NYSE:WB) did today, and its stock price isn’t punished. It’s even more counter-intuitive when the company’s stock price goes up, as it did after Wachovia said it lost $8.9B in the second quarter of 2008. Despite the sour news, Wachovia was up over in 15% this afternoon on the New York Stock Exchange. Why are investors rewarding the beat-up bank with a share price boost? A closer look at Wachovia’s recent history helps solve the WB mystery and explains why its investors are still riding high.
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Wachovia Announces a $9 Billion Loss, and its Stock Price Rises
(The Wikinvest Daily Angle, 7/31/08)
Wachovia Sale Talks On
(naked capitalism, 9/26/08)
Citi-Wells Negotiations Over Wachovia Reveal Bank In Worse Shape Than Thought
(naked capitalism, 10/8/08)
