Options action in Wells Fargoexploded on speculation the bank may be planning a secondary to pay back TARP.
However, published reports say the bank plans to repay funds obtained from the government’s bank bailout program without raising equity.
"We will pay it back, but we’re going to pay it back in a shareholder-friendly way,” John Stumpf, president and chief executive officer of the San Francisco-based lender, said in an interview today on Bloomberg Television. ‘We are now earning capital so quickly, organically, we don’t want to dilute our existing shareholders.”
What’s the trade?
I think Wells Fargo trades down to $24, speculates Guy Adami. I’d play it short.
It seems that options investors are placing bets that Wells goes lower, echoes Pete Najarian.
I don't see why anybody would buy Wells Fargo when they could buy JPMorgan , adds Joe Terranova.
Find out what analyst Paul Miller of FBR has to say about the sepculation. Watch the video now.