Analyst: BofA with a market cap of only $65b needs $40-$50b of new capital

[Ruby the Liberal]

:wow:

This is so not good for the too-big-to-fail. Forgetting the dilution, their stock tanked another 8% today AND is trading at 1/7th of what it was before the crisis. Time to break them up.

(My prediction - they sell off Merrill)

Bank of America (BAC) insists it has more than enough capital, but the market clearly disagrees.
The stock was pounded again today in an up market, dropping 8% to $6.42. One analyst, Layla Peruzzi of Jefferies, thinks that Bank of America needs to raise an eye-popping $40-$50 billion.

-snip-

Three years ago, before the financial crisis, Bank of America's stock was trading above $50, more than 7X today's value. For two years after the financial crisis and disastrous purchase of Countrywide, the stock traded above $15, 2X today's value.

So the company had plenty of time to store acorns for a rough winter. But despite a near-death experience during the financial crisis two years ago, it never learned.

Read more: http://www.businessinsider.com/bank-of-america-may-need-to-raise-40-50-billion-of-capital-analyst-2011-8#ixzz1VnAMgrVK