Tuesday, September 16, 2008
Short Idea - Wells Fargo
This stock is insane. Earnings are down around 40% from its peak and yet the stock is near its all-time high. I could go into much more detail on this company but will leave it at that.
Of course I shorted this pig waaaay too early.
I bought more puts today - Jan 30s at $3.20.
These puts are *expensive* but so were Lehman puts, Bear Stearn's puts, Fannie Mae puts,....
Just in the past few days, Wells Fargo announced about $500 million in writedowns tied to Fannie Mae preferreds and losses from Lehman's bankruptcy. What did the stock do?
Today it closed up 3.93 to 34.93!
As far as I am concerned, Wells is playing a shell game with their non-performing loans. At some point soon it'll be:
Damn, that was a gratuitous swipe at holy matrimony!