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JPMorgan Raises $10 Billion in Stock Sale After sale of WaMu

09.26.08 | No Comments

JPMorgan Raises $10 Billion in Stock Sale After WaMu
By Elizabeth Hester from bloomberg.com

Sept. 26 (Bloomberg) — JPMorgan Chase & Co., which bought most of Washington Mutual Inc. yesterday, raised $10 billion in stock sale today.

JPMorgan, which is taking over deposits and branches of the Seattle-based savings and loan, sold the shares for $40.50, or 6.8 percent lower than yesterday’s closing price of $43.46. The New York-based bank sold 246.9 million shares, according to a statement today.

JPMorgan raised more than the $8 billion it was seeking to offset an estimated $8 billion in credit provisions, write downs and losses in the third quarter. The company’s stock has remained unchanged this year through yesterday compared with a 19 percent drop in the 24-member KBW Bank index.

WaMu is the latest casualty of a financial crisis that drove Lehman Brothers Holdings Inc. and IndyMac Bancorp Inc. out of business and led to the hastily arranged rescues of Merrill Lynch & Co. and Bear Stearns Cos., which was itself absorbed by JPMorgan. WaMu in March rejected a takeover offer from JPMorgan Chief Executive Officer Jamie Dimon that the savings and loan valued at $4 a share.

JPMorgan is taking on $176 billion in mortgage-related assets and writing down the value of it and other portfolios by about $31 billion, the company said. The bank will make a one- time payment of $1.9 billion to the U.S. Federal Deposit Insurance Corp. as part of the deal.

JPMorgan fell 56 cents, or 1.3 percent, to $42.90 at 9:56 a.m. in New York Stock Exchange Composite trading.

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