Here’s an FT Alphaville snapshot of just how bad things are for WaMu this morning.
After ousting CEO Kerry Killinger yesterday, the thrift’s share price slumped as much as 24 per cent. That’s despite suggestions that the new CEO, Alan Fishman, may have been brought in ahead of the bank putting itself up for sale. Or liquidation. Or a return to profit. It all depends on who you ask.
Short interest in the stock is still relatively high, with almost 25 per cent of its market cap on loan, according to Data Explorers’ Short Stories. In comparison, about 30 per cent of Fannie Mae’s market cap was on loan in late July.
Long-only institutions have also been selling their WaMu stock, Data Explorers says. The lendable quantity has gone from 300m shares in March, to 450m now.
Worse still are WaMu’s credit swaps, at over 1400 basis points – higher than Fannie & Freddie at about 40bp, or Capital One or American Express for that matter. Mish’s global economic trend analysis has the chart:
Of course, WaMu was heavily involved in subprime, ranking 11th among subprime lenders in 2006, according to Inside Mortgage Finance.
With the prospect of as much as $19bn in bad debt writedowns looming, any buyer will have to have big, err, bank facilities.