JPMorgan’s raising capital too
JPMorgan Chase (JPM) isn’t resting on its laurels. Less than a day after posting first-quarter numbers that set off a sharp rally on Wall Street, the bank sold $6 billion in non-cumulative perpetual preferred shares, Bloomberg reports. The cash won’t come cheap: The shares will pay a fixed 7.9% dividend for 10 years, and a floating rate after that. JPMorgan stock was down fractionally in trading Thursday.
In joining rivals such as Lehman Brothers (LEH), Wachovia (WB) and Washington Mutual (WM) in raising new capital this month, JPMorgan is showing that it’s not getting swept up in talk that CEO Jamie Dimon has the credit crunch all figured out. Indeed, one of the bank’s self-described fans warned Thursday that investors shouldn’t rush into the stock, which has risen 22% in the month since JPMorgan agreed to buy Bear Stearns (BSC) in a Fed-arranged rescue. “My analysis at the moment is that this company is having a great deal of difficulty dealing with the current economic downturn,” Punk Ziegel analyst Richard Bove wrote. “Be cautious.”
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