What do you guys think this information will do for the stock? I am going to be closely monitoring the effect of this news on the stock tomorrow. Anyone know of any examples of this happening in the past and what effect it had on the stock? I recently read a research paper by a college student who wrote about the effects of tarp payment on stock performance which provided a great boost to the stock price after the initial payments.
First, it signals the investment world that the FDIC confirms that the bank is "out of the woods," a point consistently made by bank management, but the FDIC has a policy of not putting two problem banks together to form an even larger problem.
Second, the bank has already indicated it will repay the TARP by the end of this year, given regulatory approval. That the FDIC has confidence in Synovus' ability going forward suggests that such approval will be forthcoming.
Third, your college student's observatoions are accurate.
Hopefully provides a lil boost as it shows they're on the right path.... But this year has been rough in terms of pps action, so it's really hard to say. Every profitable quarter used to make the stock jump about .30 cents, but now that TARP is closer it seems that traders are jumping in and out hoping to capitalize on TARP news, then fleeing after reading that TARP is still a few months away. Past quarters those .30 jumps would become the new price floor of the stock, but past 2+ quarters the floor has been 2.50.
But I do agree that the TARP payment will provide a good boost to the stock... And then a year or so after that comes the beginning of the dividend increases to further propel the stock up.