Comments on: BAC/CFC Baseball Analogy http://www.peridotcapitalist.com/2008/01/baccfc-baseball-analogy.html Chad Brand's stock market and investing blog Wed, 17 Mar 2010 16:40:11 -0600 http://wordpress.org/?v=2.8.5 hourly 1 By: Chad Brand http://www.peridotcapitalist.com/2008/01/baccfc-baseball-analogy.html/comment-page-1#comment-799 Chad Brand Sat, 12 Jan 2008 16:19:00 +0000 http://www.peridotcapitalist.com/?p=537#comment-799 Alex,<br/><br/>I included the $2 billion they already invested in CFC's convertible preferred stock. The media has been wrongly reporting for a while now that BAC lost most of that investment because the preferred was convertible at $18 and now the stock is $6. <br/><br/>They ignore that BAC has the option to convert at $18 but doesn't have to (and they won't). However, while they are buying all the shares for ~$6, they also will not really get all of their $2 billion plus interest back, because when they own CFC they'll just be paying themselves the principal and interest out of their own pocket. Hence, in reality, their purchase price is more than $4.1 billion. Alex,

I included the $2 billion they already invested in CFC’s convertible preferred stock. The media has been wrongly reporting for a while now that BAC lost most of that investment because the preferred was convertible at $18 and now the stock is $6.

They ignore that BAC has the option to convert at $18 but doesn’t have to (and they won’t). However, while they are buying all the shares for ~$6, they also will not really get all of their $2 billion plus interest back, because when they own CFC they’ll just be paying themselves the principal and interest out of their own pocket. Hence, in reality, their purchase price is more than $4.1 billion.

]]> By: AlexG http://www.peridotcapitalist.com/2008/01/baccfc-baseball-analogy.html/comment-page-1#comment-798 AlexG Sat, 12 Jan 2008 15:49:00 +0000 http://www.peridotcapitalist.com/?p=537#comment-798 Just wanted to point out purchase price is 4.1 Billion,which would make the deal sweeter for BAC. :)<br/><br/>-Alex<br/>http://www.lacontra.net Just wanted to point out purchase price is 4.1 Billion,which would make the deal sweeter for BAC. :)

-Alex
http://www.lacontra.net

]]> By: Larry Nusbaum http://www.peridotcapitalist.com/2008/01/baccfc-baseball-analogy.html/comment-page-1#comment-797 Larry Nusbaum Fri, 11 Jan 2008 23:21:00 +0000 http://www.peridotcapitalist.com/?p=537#comment-797 "Countrywide earned between $2.2 billion and $2.7 billion in profit every year between 2003 and 2006."<br/><br/>And I hear the Stankees need pitching! Why not sign Gibson, Koufax and Seaver? They all used to be 20 winners! “Countrywide earned between $2.2 billion and $2.7 billion in profit every year between 2003 and 2006.”

And I hear the Stankees need pitching! Why not sign Gibson, Koufax and Seaver? They all used to be 20 winners!

]]> By: Mark Perkins http://www.peridotcapitalist.com/2008/01/baccfc-baseball-analogy.html/comment-page-1#comment-796 Mark Perkins Fri, 11 Jan 2008 22:16:00 +0000 http://www.peridotcapitalist.com/?p=537#comment-796 "home run" <br/><br/>yea, then we can do this all over again. Maybe the next liquidity crisis will be more like the panic of 1907. Glass-Steagal had a purpose. “home run”

yea, then we can do this all over again. Maybe the next liquidity crisis will be more like the panic of 1907. Glass-Steagal had a purpose.

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