Jul
14
WaMu (WM): Epic Fail
Filed Under Banks, Markets, Real Estate | 1 Comment
The markets have lost almost all confidence in Washington Mutual and their exposure to residential mortgages (nearly $300B worth).
The stock is now trading at $3.6B market cap, or about 16% price-to-book.
Chances are, investors got it right. While the writedowns may be slow to come for WaMu, they will definitely have to mark assets down billions upon billions of dollars as delinquencies and foreclosures mount.
Shareholders were recently diluted when TPG acquired a preferred ownership stake at $8-$9.
Will the Fed, or possibly another bank, step in and take over the ailing firm’s balance sheet?
