Bank of America shares seesaw on rumors of new stock sale
Is another stock offering in the works for Bank of America Corp.? The Charlotte, N.C., financial giant denies it — and investors sent shares higher in relief.
The bank’s shares fell 27 cents to $9.53 on Monday on the latest in a series of rumors about a stock sale, which would dilute the holdings of existing shareholders.
BofA stock was up again by 20 cents, or 2.2%, at $9.73 in midday trading Tuesday after the bank issued its terse denial: “Contrary to market rumors, Bank of America has no intention of issuing additional equity in a secondary offering.”
BofA Chief Executive Brian Moynihan has repeatedly assured shareholders that the bank will be able to comply with tougher U.S. and international capital requirements without issuing more shares. That the rumor has emerged again is a sign of just how skeptical the market has become about BofA’s prospects.
Perhaps the latest denial will be the last for now. BofA showed higher than expected capital levels in its fourth-quarter earnings report and last week it passed the Federal Reserve’s latest stress test, showing its reserves would be adequate even if the economy took another terrific tumble.
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