NEW YORK - HCBK the bank from Paramus New Jersey hit a new low of $8.93. The Markets Are Open has been predicting the stock to head lower since January. This is because the company is losing business to Fannie Mae and Freddie Mac. Interest revenue on loans declined by over 7% in their last quarter. The company also faces problems because it has more debt than most other banks. HCBK borrowed $30 billion at 4% interest but with interest rates declining the fair value of these loans are closer to $32 billion meaning shareholders equity is overstated. The company was issued a MOU (Memorandum of Understanding) by the OTS (Office of Thrift Supervision) which demanded the bank get their balance sheet in order.
AIG stock is up on the day, bit it is down over 50% from its high of $62. The U.S. government sold over 200 million shares yesterday but still owns 77% interest in the company. Investors are afraid that AIG may issue more shares in the future. Investors may also be concerned with the amount of assets AIG is still trying to sell. According to their most recent filing the company is planning on selling $58 billion of assets. Even though the company trades under book value, this book value is measured before these assets are sold. Current accounting conventions require the firm to mark down the held for sale assets to fair value less costs to sell. However investors may feel AIG will sell these assets at a discount lower than the amount on their balance sheet.
Lowe's, the home improvement retailer has also seen its stock move substantially lower since it reported. The company said it earned $461 million of profit. Will it go to its 52 week LOW?
To see the full Lowe's report click here.
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