Wow! Wells Fargo has raised $11 billion through a sale of stock to finance its purchase of Wachovia. Amazingly, at a price of $27 per share, that’s just a few percentage points off the market price — no need to offer an investor some ridiculously fat special dividend to part with their cash. The bank may sell another 61 million shares.
The good news is that there’s money out there for healthy banks. The bad news: Banks that can’t raise money can’t credibly blame irrational mass hysteria and a fear of lemons. Wachovia is a done deal. The two stocks are now basically trading as one.
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