Wachovia Takes Massive $23.9B 3rd Quarter Loss

Writedowns lead to $11.18 per share loss; Wells Fargo says merger on track
By Jim O'Neill,  Newser Staff
Posted Oct 22, 2008 8:40 AM CDT
Wachovia Takes Massive $23.9B 3rd Quarter Loss
In this Sept. 29, 2008 file photo, a woman is reflected in the window of a Wachovia branch office in New York.   (AP Photo/Peter Morgan, file)

Wachovia reported losses of $23.9 billion in the third quarter, a whopping hit of $11.18 per share that blew by analysts’ estimates of a 2-cent-per-share loss, reports Bloomberg. But Wachovia’s loss—virtually all tied to mortgages or mortgage-related securities—may be Wells Fargo’s gain.

New tax rules allow Wells Fargo, which agreed to buy Wachovia for $14 billion, to more easily absorb the losses. “The more losses the better off they are,'' an analyst tells Bloomberg. “It's kind of a free pass.'' Wells Fargo said the company is “on track” to complete the merger, which will help give it a nationwide presence.
(More financial crisis stories.)

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