Wells Fargo & Company Announces $6 Billion Common Stock Offering

[Lucky Luciano]

Source: BusinessWire

SAN FRANCISCO--(BUSINESS WIRE)--Wells Fargo & Company (NYSE:WFC) announced today a proposed offering of $6 billion of common stock to the public.

J.P. Morgan Securities Inc. is acting with Wachovia Securities as joint bookrunning managers for the offering.

Wells Fargo has an existing shelf registration statement on file with the Securities and Exchange Commission (SEC) and will file a prospectus supplement related to this offering. Prospective investors should read the registration statement (including the base prospectus), the prospectus supplement and other documents Wells Fargo has filed with the SEC for more complete information about Wells Fargo and the offering. Investors may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, Wells Fargo, any underwriter or any dealer participating in the offering will arrange to send investors the prospectus if requested by contacting J.P. Morgan Securities Inc., 4 Chase Metrotech Center, CS Level, Brooklyn, NY 11245, Attention: Prospectus Department, 718-242-8002.

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CONFERENCE CALL INFORMATION

Wells Fargo will host a conference call Thursday, May 7, 2009, at 2:30 p.m. (Pacific Time) / 5:30 p.m. (Eastern Time) to discuss details of the offering. It is highly recommended for all parties to dial into the conference line at least 15 minutes prior to the start of the call. Investors can call [phone] (US/Canada) or [phone] (International) with the Conference ID #99183364, or listen via live audio webcast. The live audio webcast will be available at http://event.meetingstream.com/r.htm?e=146294&s=1&k=2A197319E09D5432D029195030655CD5 and presentation visuals will be available at https://www.wellsfargo.com/invest_relations/equity_offering.

Wells Fargo & Company is a diversified financial services company with $1.3 trillion in assets, providing banking, insurance, investments, mortgage and consumer finance through more than 10,400 stores, over 12,000 ATMs and the internet across North America and internationally.


Contacts
Wells Fargo & Company
Media
Janis Smith, 415-396-7711
Julia Tunis Bernard, 415-222-3858
or
Investors
Bob Strickland, 415-396-0523
Jim Rowe, 415-396-8216



Read more: http://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsId=20090507006441&newsLang=en

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Let's see how well this trades - they have had a nice run with their stock over $26 this morning - though it closed at $24.76.

I am hearing that the pricing range will be $20.50 to $22. If it prices at $22, then it is very bullish...$20.50 not so much...the first bank to raise capital after stress tests.

All eyes should be on this - if a large financial instituion besides Goldman can raise money, then it is super bullish for the economy as a whole. WFC is very very very smart to go out and raise money immediately after the stress tests. Being first (I will exclude Goldman) to raise capital is HUGE HUGE HUGE - others needing to raise money will have to sell at steeper discounts if they can sell stock at all now that WFC has issued.


****DUers that have time should try to get in on the conference call!!!!!!!!!!! It will be a bit boring, but instructive nonetheless for those who care about the economy.

[truedelphi]

1. K & R for reading later. Thank U for posting this. n/t

[Lucky Luciano]

2. WFC trading with a high 23 handle - they should have no trouble

pricing this at $22 - Actually, the way it is trading, I would not be surprised to see them up the offering to $10B.

[izquierdista]

3. Bookrunning managers?

AKA bookies. Who said Wall Street wasn't just a big casino?

[Lucky Luciano]

4. Haha...that is the terminology that has always been used

for stock offerings. WFC continues to trade very very well - trading around $24 in the aftermarket. People are going to be begging to get in on this deal the way it looks. I bet people putting in for 250K shares get 100K if they are lucky because the demand is looking like it will be very high - even though Morgan Stanley is also issuing some supply to the market.

[aquart]

5. Why is it looking good?

Stocks remain a mystery to me. An insolvent bank wants money and says give me yours, I will give you a piece of paper you will never see. But it's there. And you can sell it to someone else. For more. Later.

Why would you do this instead of buying a lottery ticket or chewing gum?

[Lucky Luciano]

6. WFC is only cash short because of their takeover of Wachovia.

Had they not taken Wachovia, then WFC would have been one of the most well capitalized - though their not taking Wachovia could have crushed the economy. WFC is being asked to shore up their Wachovia purchase. It will trade very well on a short term basis though which is what I was thinking - it looks like it may trade around $24+ tomorrow and if you can buy shares, you can probably get them for around $22 and trade out of them for a couple bucks - but you may want to hedge with futures (which are likely to be going up) because you never know what other headline risk may shock the market (e.g. unemployment comes out tomorrow which will cause volatility in the markets tomorrow starting at 830am).

Also the $13.7B is not being used to short up insolvency - it is being used to make sure WFC can handle loan losses if unemployment goes to 10.5%.

Also, they are not selling the full $13.7B of stock because, according to the conference call, since they cut their dividend, it will give them a lot of extra cash over the next 6 months to cover the balance of the $13.7B without diluting shareholders further.

[aquart]

7. THANK YOU.

It was all new knowledge and I understood every word. This is one of the subjects where I need to be led by the hand, and I am most grateful for your patience in seriously answering me.

[Lucky Luciano]

8. Your welcome....and the deal just finished a few second s ago.

It prices at the high end of the range - $22 as I thought...and they did up the size of the offering as I also suspected they might just because the stock was trading really well and the demand was very high - they raised $7.5B. The way it was trading last night, I thought they might up it to $10B until the conference call suggested they were not interested in diluting much more - but they could not resist selling into all that demand and increased it to $7.5B. Part of the result is that it is now tradin a bit under $24, but that is ok...unemployment comes out in a minute...