Many analysts raised their view on Bank of America Thursday including FBR Capital, which upgraded the stock to outperform from market perform reflecting its positive view on BofA’s move to repay TARP.
As you likely know, after the bell Wednesday, BofA stunned the Street by announcing it would pay all $45 billion in TARP funds -- and as a result -- wriggle free from government restrictions on executive pay as well as other restrictions that come along with bailout funds.
Perhaps the most important aspect of these developments – at least to traders -- was the announcement that BofA would sell up to $18.8 billion in securities that will convert into common stock once shareholders approve an increase in its share count. (The remainder of the $45 billion would be repaid through $26.2 billion in cash.)
Although the offering was originally scheduled for Monday, the bank said because of strong demand, it offered its shares sooner. In fact, after hours Thursday Bank of America Corp sold more than $19 billion of equity amid stronger than expected investor interest.
The securities sold at $15 each, about 5 percent below where Bank of America shares closed on Thursday.
Does the offering make share unattractive at least for the time being - or does wriggling free of TARP make the stock a buy?
For insights we turned to Jeff Harte of Sandler O'Neill.
I think we’re looking at a good entry point right here, said Harte. This is a really good franchise trading cheaply.
Uncertainty is usually the biggest problems for stocks and there’s been a lot of uncertainty at Bank of America.
But the TARP takes the government out of the picture and that’s the uncertainty that the market wanted gone – now it’s gone.
Got something to to say? Send us an e-mail at email@example.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment but not have it published on our website send those e-mails to .
Trader disclosure: On December 3rd, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Najarian Owns (AAPL) Call Spread; Najarian Owns ((BAC) Call Spread; Najarian Owns (INTC) & Short (INTC) Calls; Najarian Owns (DELL) Calls; Najarian Owns (TJX); Najarian Owns (TXN); Najarian Owns (FCX) Call Spread; Najarian Owns (INTC) & (INTC) Calls; Najarian Owns (UAUA) Call Spread
For Dennis Gartman
Funds Managed By Dennis Gartman Own (AAPL)
Funds Managed By Dennis Gartman Own (FCX)
Funds Managed By Dennis Gartman Owns (GLD)
Funds Managed By Dennis Gartman Are Short (GS)
Funds Managed By Dennis Gartman Are SHort (JCP)
Fund Managed By Dennis Gartman Own Gold
For Jeff Harte
Sandler O'Neill Expects To Receive Compensation From (BAC)
(BAC) Is A Client of Sandler O'Neill
Sandler O'Neill Has Received Compensation From (C)
Sandler O'Neill Expects To Receive Compensation From (GS)
(GS) is A Client of Sandler O'Neill
Sandler O'Neill Has Received Compensation From (JPM)
(JPM) is A Client of Sandler O'Neill
Sandler O'Neill Has Received Compensation From (MS)
(MS) is A Client of Sandler O'Neill
CNBC.com with wires