Last Monday an $8.5bb settlement was announced. In it STI was mentioned. ALL the other banks either filed and SEC form or issued a corp PR (or both) as to their share down to the million, i.e., C = $305mm, JPM = $753mm, WFC = $766mm etc.
Given the total cash part of the settlement was $3.3bb and reducing this amount by known statements from other banks, STI's cash portion is $293mm. That's HUGE for a bank the size of STI.
Question...why do they feel a $293mm cash hit to Q4 earnings in NOT material? Why don't the rules matter to them? Is it ignorance, arrogance, or is something much bigger than the $293mm coming...i.e., a kitchen sink legal dump at the earnings call that involves much more than $293mm for which they want to keep control information as best as possible.
I don't think so. Any bank large enough to gobble up STI would most likely run into the 10% max deposit threshold. Moreover, STI has FAR TOO GREAT of legacy loan and MBS risk unresolved. That said, I could see STI being a suitor of small regional banks to expand its footprint. They better do something or they will eventually be swallowed up by the big guys but not by choice.
If they don't want to tell us we have to guess. I guess their cash settlement share is $500 million, or $1 / share hit to Q4 earnings.
Getting really sick of this bank. All this "cost cutting". Then they go out and raise $500mm in a preferred offering and put up another capital raise on Monday probably for another $500mm. This follows selling all the Coke stock and losing all that divi revenue.
Wonder how they will explain this expense...they said so many times how they were done with legacy mortgage expenses after the $375mm provision in Q3.
I have no idea why they need to raise all this capital but it can't be good.
the only reason I can think of that STI refuses to tell investors how much their portion of the $8.5bb settlement is -- in cash and in customer aid -- is because there is another bomb coming. It's Fed stress test and earnings time. They have to tread carefully. And announcing a $500mm CASH hit from this settlement and another $several hundred million hit from something else a few days apart would look terrible. I fully expect STI to make an impromptu conference call annuncement in which they pre-announce and tell us something bad.
This is all too wierd. Non-disclosure of material events is never a good thing.
all the other banks did. What if their portion is $500mm and they take it in Q4...that changes things.
The only press release yesterday was for another capital raise through floating rate bonds.
So, they sell KO stock at $40yr div loss
they do a preferred offering a few weeks go for $500mm at a $30mm a yr expense
now they do yet another capital raise?
#$%$ is going on with this dog. They preach cost cutting and all they are doing is secondaries.
if all these AAPL products are in full tilt production? Doesn't make sense. This looks like "buy every rumor all rolled into one big pump" and "sell the news of an Iphone 5 that isn't much better than the 4s I just bought" story.
HD is not doing that great...their revs were not great in their earnings call last week. HD is just doing a better job managing their business and buying back shares.
But bottom line, the home improvement trade is over...with foreclosures at 5 years lows a massive chunk of their business also went away. And the comps we bulls enjoyed all year turn into headwinds in Q4. This is a short now I am afraid.
The multiple is far too high for a company in contraction.
given a large pct of the past 2 years HD revs were foreclosure remodeling to flip or rent it seems to me this would be a huge red flag leading indicator.
Moreover the consumer fell off a cliff in May and June...that's pretty well established. What are he odds HD kept selling record numbers of LG $1500 washer and dryers during this time? I think low.
Anyway, place your bets...other than capital flowing to companies paying dividends taking them to stupid multiples I am not seeing the growth story here. I did two years ago when foreclosures were churning hard but not now.
It's a fact. You are a retard. IBM been underperforming for a while now. An earnings warning and guide lower is on tap. Short to $160. Perhaps long then depending on EU and China developments.
no fund manager can be long this name and have any credibility with investors. Especially if they are lagging in performance like most are this quarter. This name on the books at close today is a huge black eye for any credible fund manager.
Thus they are forced to sell today. Perhaps buy back on Monday but they will sell today. Much of these shares were purchased ahead of earnings. If RIMM would have beaten and rallied they could have all held. Today is going to be ugly. Pre market amateur hours mean nothing...short this open.
tomorrow in the $30s