This has not been a good week for Bank of America. Shares of Bank of America (NYSE: BAC) dropped over 3% today to $10.95 per share today. The stock has been in a free fall over the past year losing nearly half of its value.Why is the stock dropping?
The banking giant dropped today due to fears over a potential damaging report from WikiLeaks. The Internet site is rumored to have damaging information about lending practices at the nation’s largest bank. The firm has already been penalized for security violations.
Lehman Brothers is currently suing Bank of America for $150 million dollars over derivatives transactions. It appears that Bank of America does rightfully owe Lehman the money but is trying to use unenforceable clauses to keep Lehman from collecting this money. It’s not a large amount of money for Bank of America but the lawsuit comes at a bad time for BofA.
Although the WikiLeaks report may be another black eye to Bank of America’s reputation, I doubt that it will do much to materially change the earnings capability of BofA. I think that the price drop is unjustified and remain a buyer of Bank of America’s shares.
Bank of America Keeps On Dropping is a post from:
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