Bank of America has become one of those companies that sees it all. After Tuesday?s slaughter (it plunged 7.89%), the lender is still finishing sessions in the red. Today it dropped more than 6% during the last 10 minutes of trading on Wall Street and was last valued at $6.01 per share.
This level has not been seen since BofA posted historical minimums in March of 2009. Then, its credit default swaps (CDS) were hitting annual highs of 350 basis points.
The bank suffered through four consecutive beatings during which it plunged 15%. Investors are not approving of the possibility that BofA could have to raise capital in order to clean up its damaged accounts.
Not in error, less than a month ago the media analysts covering the bank?s story started estimating that the fourth largest bank in America would register losses in 2011. Now, as we reflect on the Q1 results, the market consensus estimates that it will end the fiscal year with total losses of $2.55 billion.
Capital needs and impending losses are only two strikes against Bank of America. AIG´s multimillion dollar demand is another reason that BofA has already lost more than half its stock price in 2011. It is one of the Dow Jones worst performers of the year.
