Bank of America Falls Below $5 — Monday’s IP Market Recap

BofA's latest slide continues, leading the big banks lower

   

IPMarketRecap Bank of America Falls Below $5    Monday's IP Market RecapIt’s been a year of bumpy roads for banking giant Bank of America (NYSE:BAC), and Monday saw BofA stumble over another pothole.

BofA shares sunk below $5 per share — $4.92 at one point — their lowest value in more than two years, since the depths of the financial crisis. Stocks that fall below $5 run certain dangers: Some mutual funds won’t hold them, and some brokers won’t allow investors to buy or short sub-$5 stocks on margin.

However, the low point is merely a continuation of a yearlong trend that has seen BAC shares shed more than 60% of their value. Less than two months ago, shares were selling at less than $7 and some were calling that a floor, believing BofA to be a bargain. However, numerous business and financial problems — as well as the constant seesawing on Europe’s daily headlines — meant the stock still was an enormous risk in the short term. Since that point, BAC shares have shed more than 25%, and BofA ended Monday down 4% at $4.99.

Bank of America had plenty of friends to commiserate with Monday. Citigroup (NYSE:C, -4.65%), JPMorgan (NYSE:JPM, -3.73%), Goldman Sachs (NYSE:GS, -2.66%) and Wells Fargo (NYSE:WFC, -2.58%) all sold off in kind.

Also later Monday, AT&T (NYSE:T) announced it would end its nine-month-long bid for the No. 4 U.S. telecom, T-Mobile USA. The deal had run into opposition from the Federal Communications Commission and the Department of Justice in the past few months. AT&T will suffer a $4 billion pretax accounting charge for the fourth quarter because of the breakup, and T shares were sliding slightly in after-hours trading, down 0.5%.

Social gaming company Zynga (NASDAQ:ZNGA) continued to slide for the second trading day since its initial public offering. After ending Friday down 5% from its offering price of $10, it shed close to another 5%, ending Monday at $9.05. The company faces numerous doubts, among them the ability to recreate blockbuster games like FarmVille and Mafia Wars, which have seen monthly user numbers rapidly decline of late.

Looking further and further away from going public is Twitter. On Monday, Saudi Prince Alwaleed bin Talal announced he bought a $300 million stake in the social networking company, adding Twitter to an investment portfolio that includes large holdings in Apple (NASDAQ:AAPL), Citigroup and News Corp. (NASDAQ:NWSA).

Three Up

  • VirnetX Holding (AMEX:VHC): Up 17.7% ($3.76) to $25.
  • LDK Solar (NYSE:LDK): Up 11.24% (50 cents) to $4.95.
  • Elan (NYSE:ELN): Up 6.35% (75 cents) to $12.57.

Three Down

  • Eldorado Gold (AMEX:EGO): Down 13.62% ($2.04) to $12.94. (Read more about Eldorado here.)
  • Delta Air Lines (NYSE:DAL): Down 5.65% (51 cents) to $8.51.
  • General Motors (NYSE:GM): Down 5.46% ($1.10) to $19.05.

As of this writing, Kyle Woodley did not hold a position in any of the aforementioned stocks. Check out our list of previous IP Market Recaps.


Article printed from InvestorPlace Media, http://investorplace.com/2011/12/bank-of-america-bac-stock-5-zynga-twitter-ipo-market-summary/.

©2014 InvestorPlace Media, LLC

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