Falling Knives … update BA / CFC
Bank of America is close to buying Countrywide Financial (WSJ) … Countrywide is said to need around 4 bln$ fresh capital … AGAIN … within next weeks.
Interestingly enough, Bank of America, sits 1.5bln$ in the red on this “trade” and sees, the market cap of CFC (even after a more than 50% rise today) is only 4.5bln$.
So it might make sense for BoA to buy them and to gain marketshare … Let’s hope, that BoA knows, what they are doing.
They might find out, that it will be VERY much more expensive than they think right now.
Even for them, it might be a BLACK HOLE!!!
Tags: BoA, Countrywide
