Wedbush Sells More of Great American

Wedbush Corp., the largest single shareholder of Great American Bank stock, sold off a huge chunk of its holdings in the troubled savings and loan last month.

From April 27 to May 15, Wedbush sold 713,500 shares of its Great American stock, leaving the parent company of Wedbush Morgan Securities with 2,530,816 shares, or 10.5% of the total Great American stock outstanding.

Before Wedbush began selling off its Great American stock in earnest in April, the Los Angeles-based firm owned at one time 4,074,023 Great American shares, a 17% stake in the thrift. Wedbush chairman Ed Wedbush is a member of Great American’s board of directors.

Wedbush, which paid an average $11 a share to acquire its 17% stake in Great American, absorbed huge losses on its April and May stock sales, which were transacted at prices ranging from $2.625 to $1.75 a share.

On its remaining Great American shares, for which Wedbush paid $27.5 million, the company faces a paper loss of more than $20 million on its investment, based on Great American’s closing price of $2.75 a share Monday.

The stock sales intensified in mid-May with Wedbush selling 156,000 shares of Great American on May 16 at prices as low as $1.75 a share.

Ed Wedbush was unavailable to comment Monday on the reasons for the stock sales. According to regulatory filings, Wedbush Corp. borrowed money to buy its Great American shares, and there is speculation that the company had to sell some of the shares to help pay off the debt.