Sunday, April 29, 2012

Stocks DD Cites: Bank of America - TARP warrant thesis

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Investors that are betting on housing recovery, no big dilution(warrants seem to have some anti-dilution adjustments) in banks to support higher capital requirements due to adoption of basel standards, are buying the unique 8 year warrant(expires 2018 i think) with strike price of $13. It last exchanged hands for ~$4. While probably no investor can understand the complexity of bank of america's financials, the bet is more grounded from macro standpoint.

Bruce Berkowitz's thesis ->

Another investor's thesis ->

BAC warrant chart ->

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