Wachovia: Facing Extinction, Pays $20 Dividend

From PR Newswire:

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?