With estimates of $200M more in loan losses, the book value will drop into the 40c range. I just I don't see how you guys think this is a good investment. Everyone that thinks it's great seems to have a problem working with numbers.
At a share price of 70 cents, it's priced for the $120M it earned on average annually between 2001-2006. How is this possible? Because they issued 22x more shares...so those historic prices you all keep looking at need to be divided by 22x. For example, back in 2007 when the stock was $12/shr...divide it by 22 and you get 54 cents.
Back then they only had 70M shares outstanding. Today they have 1.5 billion shares...shareholders were diluted...new shares went to new people. It's like you're a 50% owner in a business with a buddy and one day he adds another 42 partners (because you guys need money badly to pay off debt) all with equal shares. If you all have equal shares, you no longer have a 50% ownership stake. You were diluted. That's exactly what FBC did. There's no way this stock can get back to those historical prices, without a reverse split of course. There earnings power certainly didn't rise 22-fold...if anything, it's gonna drop with financial regulation reform. Remember, all that money they raised is lost in loans defaulting. The delinquency rate ticked higher this quarter to 15%.
Here's the math of how I came to 70 cents (from above)...