Wachovia: Facing Extinction, Pays $20 Dividend
Wachovia Still Paying Dividends While Facing Collapse?
Wachovia Corporation Declares Cash Dividends On Preferred Stock
CHARLOTTE, N.C., Aug. 19 /PRNewswire-FirstCall/ — Wachovia Corporation
(NYSE: WB) announced that its board of directors has declared dividends on
three series of preferred stock.A quarterly cash dividend of $20 per share was declared on its 8.00%
non- cumulative perpetual class A preferred stock, Series J, liquidation
preference $1,000 per share. This dividend equals $0.50 per depositary
share, each representing a 1/40th interest in a share of Series J preferred
stock, which are traded on the New York Stock Exchange under the symbol
“WBPRS.” The Series J dividend is payable on September 15, 2008, to holders
of record as of the close of business on August 29, 2008.
Here is my first question. WTF? How can a company facing collapse declare these types of dividends? I wonder who the these shareholders are. How do you still declare dividends when you lost almost $10 billion dollars?
How do you pay a $20 dividend when this was the headline from yesterday:
“Wachovia And Merrill Lynch May Fail”
David Kotok of Cumberland Advisors said on CNBC that Wachovia Corp. (NYSE: WB) and Merrill Lynch & Co. Inc. (NYSE: MER) are in danger of failing. Shares of Wachovia slipped 61 cents to close at $14.96 while Merrill Lynch stock fell $1.55 to close at $24.74.
I really don’t understand how things like this happen and no one says anything. Am I wrong here? Do I not know something? I looked to see who the major shareholders were, I couldn’t find them…that can’t be good. Maybe I should look harder. But tell me, if this was your company, would you be pushing more money out the door?
General Electric on the Prowl for Financials
- GE CEO Jeff Immelt may be preparing for a shopping spree
Let me start by saying that I have always been a fan of GE. It is a great American story. A behemoth of a conglomerate that has been as nimble as a startup. Jack Welch took General Electric to new heights during his rein as CEO. Sure, he made plenty of enemies in his day, but for the most part you cannot compare any modern era business leader to Jack.
Current CEO and Chairman Jeff Immelt hasn’t fared as well. But this isn’t going to be a bitch session on Jeff. He has held his own in a completely different market than the one Jack operated in. For starters, it’s tough to be a major international manufacturing company when everyone is going green and Mr. Immelt has done a great job with the Ecomagination thing they are doing.
However, this post is about the financial side of GE, or more precisely, GE Capital. Mr. Immelt said yesterday that GE is going to be very active in making acquisitions in the troubled financial services industry. To that I say Amen brother!
Why?
Because it’s obvious these effing guys on Wall Street can’t figure out how to run a financial services company for more than a quarter without running the friggin thing into the ground. Here are some comments from Jeff yesterday on CNBC:
“We’re going to do deals right now in financial services that will fuel earnings for years,” Immelt told CNBC’s Carl Quintanilla in an exclusive interview from the Beijing Games, which NBC is broadcasting. “If you’ve got some cash, if you have a strong balance sheet, this is as good of a time you’re going to see.”
“We made more than anyone else in the fourth quarter last year,” he said. “We made more than anyone else in the first quarter last year; Bank of America was the only company that made more than us in the second quarter.”
Again Amen. This is how small companies think. Nimble, quick, strike while the iron is hot. When your competitors are shrinking violets, you expand, grab market share, and put them out of business.
That may sound a bit ruthless in this new age, room for everyone, don’t keep score at my kid’s soccer games world we live in, but that is fantasy and doesn’t portray the true realities of business life. But what the hell do I know; I am just a dumb sales guy.
InBev: Now Your Just Kidding Us Right?
MILWAUKEE (AP) — August Busch IV, chief executive of Anheuser-Busch Cos. Inc. will be paid nearly $10.4 million after the brewer is sold to InBev SA and $120,000 a month to consult for the new company through the end of 2013.
Terms of the consulting deal are currently being negotiated, according to a filing with the Securities and Exchange Commission made Friday.
Busch, a member of the St. Louis-based brewer’s founding family, will also be eligible for an additional payment of $13.3 million on various change-in-control payments and benefits, the filing said.
Last month, the brewer of Bud Light and Budweiser announced it had agreed to be sold to InBev, the Belgium-based maker of Stella Artois, Beck’s and Bass. The deal is worth $52 billion.
I understand August Busch IV taking the money. What I don’t understand is why InBev would pay the CEO of an under performing company $10.4 million as a consultant.
Get this….
This putz is going to stay on and “advise the company on new products and business opportunities, review marketing programs, and meet with retailers, wholesalers and advertisers as part of his new duties.”
Here is my question…
WTF were you supposed to be doing when you were the CEO? Your new career sounds exactly like the effing job description of a CEO running an international beverage company. But who the hell am I to judge.
Mr. Brito, you over paid. You over paid for the company as a whole, but you had to in order to get the deal done. What you didn’t have to do is over-pay this stiff. You really could have gotten away with a lot less. But, you have your own shareholders that you are responsible to and there will be a day of reckoning for you too.
In the meantime, I recommend to all shareholders that you reject the deal. If for no other reason than you will get $1.25 billion if the deal falls through, which is better than what Auggie was returning. It’s a shame, there is an entire field of Busch’s rolling over in their graves.
About the Author: I started Blabrmouth.com because I have gotten tired with the way the media treat the business news. Blabrmouth.com is a blog that cuts through the media hype.
I try and strip away the spin doctoring of press releases and hit hard with a cutting edge commentary only found in an independent business news blog. I appreciate you stopping by, and please bookmark us or subscribe to our feeds! -Robert