Wilmington Trust’s $3.84 Take Under Catches Morgan Stanley’s Pate, Suntrust’s Hodgson And 9 Other Sellsiders With Pants Down

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homeDARPAcontributorsnewsforumszh-tshirtstoredonaterssmanifesto Monday’s Markets – More Monetary Madness Posted by: ilene Post date: 11/01/2010 – 15:09 Someone has to lose but, in this case, the loser is the Federal Reserve Bank of the United States of America – who play the part of the perennial sucker as they are willing to sit down at the table and be taken for all they have two or three days a week. And why are they willing to be so generous? BECAUSE IT’S NOT THEIR MONEY! Military Strategists Have Known for 2,500 Years that Prolonged Wars Are Disastrous Posted by: George Washington Post date: 11/01/2010 – 14:03 Wise man say … Graham Summers’ Weekly Market Forecast (waiting on the Fed) Posted by: Phoenix Capital Research Post date: 11/01/2010 – 10:40 Remember, much of the market rally from early September has hinged on the belief that the Fed will announce a large QE 2 program this Wednesday. For months the Fed leaked information that this was likely to be the case. We also received forecasts from Wall Street (specifically Morgan Stanley and Goldman Sachs) stating that QE 2 ranging from $1-4 trillion was coming in November. Navigation PollsDonate To Zero HedgeRecent posts Shopping cart View your shopping cart. User login Username: * Password: * Create new accountRequest new password Zero Hedge Reads Angry BearBearish NewsBoom Bust BlogChina Financial MarketsChris Martenson’s BlogContrary InvestorCoyote BlogCredit WritedownsDaily CapitalistDaneric’s Elliott WavesDealBookDealbreakerDr. Housing BubbleFalkenblogFibozachiFund My Mutal FundGains Pains & CapitalGlobal Economic AnalysisGonzalo LiraImplode-ExplodeInfectious GreedInvesting ContrarianJesse’s Café Américain Market FollyMax KeiserMinyanvilleMises InstituteNaked CapitalismOf Two MindsOilPrice.comPension PulseShanky’s TechBlogThe Daily CruxThe Mad Hedge Fund TraderThe Market TickerThe Technical TakeThe Underground InvestorWall St. Cheat SheetWashington’s BlogWealth.netWhen Genius Prevailed Home Wilmington Trust’s $3.84 Take Under Catches Morgan Stanley’s Pate, Suntrust’s Hodgson And 9 Other Sellsiders With Pants Down Tyler Durden's picture Submitted by Tyler Durden on 11/01/2010 11:42 -0500

Chinese WallKeefeMorgan Stanley

By now everyone is aware that M&T bank acquired Wilmington Trust in today’s version of Merger Monday… however this time with a twist. The company was acquired at a 40%… discount. That’s right, as shareholders were happy with their WL positions at close yesterday, it appears the financial firm, and its acquirer were all too aware that the sellside pump syndicate was woefully wrong on the name, and 11 analysts had an average target on the stock of $10.31. The question then becomes if Wall Street is so very wrong in evaluating one of its own to the tune of a 40% plunge to closing price, and 60% to the target consensus, just how overvalued are all other financial firms, all of which continue to trade based on circle jerk rating boosts by one another, even as those behind the Chinese Wall (such as M&T management and WL executives) know all too well the fair value of assets is way below where the gullible public is buying the stock. Which is why we present some of the most egregious examples of sellside hubris and pumpatude disclosed by this price discovery event: below are the hall of shame analysts who missed this take under by about a mile.

At the top: SunTrust’s Mac Hodgson whose latest price target on WL was $22… just over 80% where the company ended up being acquired! Going down the list we see such other wizards of financial modelling as Keefe, Bruyette’s McGratty who has a $13 PT, RBC’s Cassidy who recently reiterated a price target of $12, Credit Agricole’s Ruthschow with $11, Morgan Stanley’s Pate with $10, B Riley’s Stapp with $9, and so forth. One wonders if this cadre of hall of shamers was so very wrong on WL, just how correct their other buy “calls” must be…

And for shits and giggles, here are links to the SunTrust (pdf) and Morgan Stanley (pdf) reports.

AttachmentSize MS on WL $10.pdf279.8 KB Suntrust WL $22.pdf530.29 KB 5 Your rating: None Average: 5 (7 votes)
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by Turd Ferguson
on Mon, 11/01/2010 – 11:44
#690875

Hmmm. Looks like acquisition was not “priced in”.

What an absolute farce this has all become.

Login or register to post comments by Cursive
on Mon, 11/01/2010 – 12:56
#691109

All that is left now is the long, hard slog to the other side.  Where/When is that other side?  Dunno, Japan has been looking for it for over 2 decades now.  Many of us probably won’t live to see it, but persevere we must.

Login or register to post comments by Cognitive Dissonance
on Mon, 11/01/2010 – 13:23
#691201

While Japan might be looking for “it” for over 2 decades, Japan’s equity market seems to know where Waldo is.

Down.

Login or register to post comments by CitizenPete
on Mon, 11/01/2010 – 11:45
#690877

LMAO: “One wonders if this cadre of hall of shamers was so very wrong on WL, just how correct their other buy “calls” must be…”

 

Punch them in the forehead Tyler!

Login or register to post comments by prophet
on Mon, 11/01/2010 – 11:45
#690880

Speechless. 

 

For the record I’m exiting flat my 1188 SPX short idea – time based stop. 

Login or register to post comments by SheepDog-One
on Mon, 11/01/2010 – 12:27
#691027

All longs AND shorts will soon be devoured, thats the endgame to all this.

Login or register to post comments by Xedus129
on Mon, 11/01/2010 – 11:45
#690886

M&T is a horrible bank.

Login or register to post comments by doolittlegeorge
on Mon, 11/01/2010 – 15:57
#691617

I think they’re one of few that hasn’t repaid TARP.  In fact I think they took the TARP with “the stated intention of going on a bank buying binge.”  I don’t recall that being the concept behind the legislation.  Insofar as a “take under” this is a total rip off of shareholders.  Obviously M&T soared on the news.  Isn’t it normally the other way around?

Login or register to post comments by plocequ1
on Mon, 11/01/2010 – 11:47
#690891

Whatever, Just put it on my fucking tab. What is it, $8,000 so far? Ill put it on my Credit card

Login or register to post comments by buzzsaw99
on Mon, 11/01/2010 – 11:48
#690897

They know nothing. [/crammer]

Login or register to post comments by Captain Willard
on Mon, 11/01/2010 – 11:50
#690902

Given that the bank had nearly 4% loss reserves as a % of loans, you have to wonder what this implies for the carrying value of the typical bank’s loan portfolio.

M&T looks like they marked the WL loan portfolio to 8% losses. If this could be extrapolated to the typical medium-sized bank, we face a mini Apocalypse Now in regional banking.

Login or register to post comments by 101 years and c…
on Mon, 11/01/2010 – 11:54
#690920

They may have cost their clients a lot of money, but how cash did their firms make by shorting the crap out of this company?

 

Login or register to post comments by truont
on Mon, 11/01/2010 – 11:55
#690926

That’s right, as shareholders were happy with their WL positions at close yesterday, it appears the financial firm, and its acquirer were all too aware that the sellside pump syndicate was woefully wrong on the name, and 11 analysts had an average target on the stock of $10.31.

You can’t make this $h!t up…

Still long US Equities?  Bwaaaa Haaaaaa Haaaaaa!

Login or register to post comments by plocequ1
on Mon, 11/01/2010 – 12:00
#690940

Yes, It is now offical.. All bad  news now entered into Hal 2000s Processor. Its all good.

Login or register to post comments by curbyourrisk
on Mon, 11/01/2010 – 11:57
#690931

Wonder when others will start wondering about their bank investments……

Login or register to post comments by rapacious rache…
on Mon, 11/01/2010 – 12:09
#690967

Ask Meredith Whitney

Login or register to post comments by Pining for the …
on Mon, 11/01/2010 – 12:01
#690937

Insanity made manifest, and proven beyond doubt for the world to see.  How many trillions in misallocated capital “invested” into fraudulently pumped-up companies do these clowns think the system will take before implosion?

I believe the only rational response is for all of us, in unison, to gleefully scream “JENGA!!!” as all of the pieces of this farce come crashing inexorably down around us. Wheeee, this financial apocalypse stuff is fun!

Login or register to post comments by ghostfaceinvestah
on Mon, 11/01/2010 – 12:00
#690939

Look at ABK today too, how was that trading at a $200M+ market cap when it was effectively insolvent.

Still plenty of examples left out there.  I think one or more of the mortgage insurers will soon be forced to merge at a haircut – the FHFA could easily force this to happen.

Login or register to post comments by OutLookingIn
on Mon, 11/01/2010 – 12:02
#690948

 

 Welcome to the “New Normal”! Yes Sir! Step right up. No need to fear!

Login or register to post comments by Bigger Dickus
on Mon, 11/01/2010 – 12:02
#690950

Hi guys, I have just woken up from a great night’s sleep. I am so glad I went all in just before another POMO day. Thank you Bernanke.

Oh well, how is my massive position in WL calls doing today?

 

Login or register to post comments by Bigger Dickus
on Mon, 11/01/2010 – 12:06
#690958

Lady Gaga seems to be branching out into Chinese foodstuffs. Leo, are you th one who told her to invest in this shit?

http://finance.yahoo.com/q?s=GAGA

Login or register to post comments by doolittlegeorge
on Mon, 11/01/2010 – 15:59
#691623

not quite as good as your massive short position in M&T.

Login or register to post comments by Justaman
on Mon, 11/01/2010 – 12:19
#690975

I think this is common knowledge, but for what it’s worth, I can say (by having been on the sell side at one time) that the analysts are only good for one thing…industry background information, i.e., market, distribution, and products.  Price targets are jokes.

Login or register to post comments by SheepDog-One
on Mon, 11/01/2010 – 12:23
#691011

Lookin like a fool wit yo PANTS ON THE GROUND!

Login or register to post comments by jus_lite_reading
on Mon, 11/01/2010 – 12:26
#691022

Which adds more fuel to my analysis, that the entire ponzi stock market is overvalued by – drum roll please – 65-70%.

Nothing but one giant pumped up scheme to get retail investors to part with their money at  very high, and overly inflated prices, so the insiders and Whore Street can sell SELL SELL! Which is exactly what they are doing. ALL stocks in real time, are worth less and less every single day. Never more on a long time frame.

Login or register to post comments by ghostfaceinvestah
on Mon, 11/01/2010 – 12:29
#691034

TD, your scorn is way misdirected.  The analysts are paid shills, everyone knows that.

Much like the idiocy of Bill Miller (largest shareholder in FRE when it was taken down), the most ridicule should be reserved for the morons who actually owned this stock.

Especially those who participated in the secondary offering in March at $13.25 per share.  Who were those morons???

 

12. Capital In March 2010, we completed an underwritten public offering of 21,706,250 shares of common stock. The offering was priced at $13.25 per share and raised $274.0 million, net of $13.7 million of underwriting discounts and commissions. The proceeds qualify as both tangible common equity and regulatory Tier 1 capital.”http://www.sec.gov/Archives/edgar/data/872821/000095012310047156/c99916e10vq.htm

Login or register to post comments by SheepDog-One
on Mon, 11/01/2010 – 12:37
#691058

Longs today would have to all be considered ‘morons’ then, as they’re in their positions based upon the reasoning that this is the ‘new normal, stocks just dont go down any longer, Bernanke will prevent it’…meanwhile death by 1,000 papercuts is going on every day in individual stocks.

Login or register to post comments by ghostfaceinvestah
on Mon, 11/01/2010 – 12:43
#691073

I dunno, I think idiots who buy into a secondary of a failing company are in a special class.

Look at Bonderman when he headed a $7B investment in WaMu – six months before it collapsed.  And arguably that was a better deal – at least WaMu at the time was considered too big to fail.

Who in their right mind would pour $250M into Wilmington Trust when the FDIC is shutting down 6 banks a week?  Only a special class of moron would invest in that secondary.

Login or register to post comments by Vampyroteuthis …
on Mon, 11/01/2010 – 12:47
#691087

1000 paper cuts will turn into a lot of blood. Bring on the massacre!

Login or register to post comments by TooBearish
on Mon, 11/01/2010 – 12:44
#691077

So much for “book value” valuations in bank stocks – wheres Dick Bove on this pig? All -in px target 30?

Login or register to post comments by Ned Zeppelin
on Mon, 11/01/2010 – 13:06
#691138

Wilmington Trust, in Ned’s area of operations, has been on a death watch for some time now, although the expected bidders (Bank of Montreal and TD) were no-shows and instead M&T, a Buffett investment, claims the “prize.” Autopsy revealed that a bad dose of residential development projects in the First State, especially down near the beach, were the primary cause of death.  But it does go to show, as to those TBTFs, what a cancer bad residential deals are and how they inevitably claim the host, it’s just when not if.  As we say in residential real estate, the money is made (or lost) on the land buy.  And when the bank holds the paper for 85-90% of the purchase price, say goodnight, Irene.

Login or register to post comments by andyupnorth
on Mon, 11/01/2010 – 13:07
#691143

Management cashes in their corporate stock options (money that can be freely sucked out of the ponzi scheme/stock market), and then throws out the carcass…

Login or register to post comments by johngaltfla
on Mon, 11/01/2010 – 13:12
#691156

You just have to wonder:

Is the FASB about to surprise the world and grow a pair of balls in Jaunary?

Login or register to post comments by goldmiddelfinger
on Mon, 11/01/2010 – 13:21
#691194

If STI’s target was $22 and it is trading at $4 then he misses by 450 pc not 80pc. No?

Login or register to post comments by ziggy59
on Mon, 11/01/2010 – 14:38
#691402

oh i get… M.T. Bank…is the ‘&’ a typo?

 

cripes arent they all M.T. Banks?

Login or register to post comments by DonutBoy
on Mon, 11/01/2010 – 15:48
#691604

Holy Smokes.  I never even heard of anything like this.  Sounds like lawsuit city.

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