Countrywide’s Stock Nearly Worthless, says FBR

Originally Published May 5, 2008 1:38 PM
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Although Bill Miller is catching some grief in the media today over his posture and position in Yahoo!, the shares of Countrywide Financial (CFC-NYSE) have done far more damage to his performance, and reputation, over the past year.

FBR is questioning Bank of America’s acquisition price, no doubt Ken Lewis would have do it differently is he had the chance:

Friedman, Billings, Ramsey & Co. analyst Paul Miller said in a research note Bank of America should walk away from its acquisition of Countrywide, or at very least reduce the purchase price, because of continued deterioration in the mortgage market. Miller pegged a new sale price at between $0 and $2 per share. He set his price target for Countrywide at $2.

In January, Bank of America agreed to acquire Countrywide for about $4 billion in an all-stock deal. The deal is supposed to close during the third quarter. Based on Bank of America’s Friday closing price of $39.79, the deal values Countrywide shares at about $7.25. AP

The deal, inked in mid-January, was the first glimmer of hope for a market that was looking for a lifeline after a nasty streak to start the year.

Lewis jumped on a hand grenade, but might not survive this deal if his critics have their way. And Bill Miller’s judgment here looks far worse than any missteps he made in Yahoo!, and his realative performance against his peers will be lousy again given the performance or Countrywide and Yahoo!’s shares today.

Countrywide shares fall as analysts question deal price
AP
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