"In exchange for the new support, the bank will cut its quarterly dividend to a penny, from 32 cents, and accept more stringent restrictions on executive compensation."
What happens to this stock tomorrow? Does it rally on the new bailout? Or crash further?
10 years of protection from the government for the largest bank in assets sounds like pretty good news to me. Even with the dilution, this stock has lots or room to move to the upside. On top of that, how long do the shorts stay short now....10 years. Ironically, that would make the shorts the new longs in this stock. Seems to me the shorts will want to move on to another stock that doesn't have government protection.
This POS will rally, hard to believe, but with a ringer(the Fed) to be the backstop. No worries unless some of the level 2&3 assets start eroding further/failing or more derivatives imploding. I think it will trade in the 8-11 are for quite awhile
Citi had to cut its dividend to a penny, and still rallied bigtime. A similar requirement for BAC was inevitable, and is built into the current price. High volume today was dividend investors selling out, value investors and traders buying. Trend is up short term IMO.