Update: Reuters says the offering will take place at a price of around $20-$22, which is well below the $24.76 close. Watch out
Original post: Perhaps Wells Fargo (WFC) isn’t interested in having the government convert its preferred shares to common.
The bank — which we know will be a stress test flunkie — said after the bell that it’s selling $6 billion in fresh common shares in an offering managed by JPMorgan (JPM). This would only be the second major unassisted capital raise from a bank, coming after Goldman Sachs (GS) sold shares last month.
That being said, this probably can’t fill the bank’s entire capital needs, as stress test leaks indicate that the bank nees $15 billion more.