Which bank will trade under $1 next?

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Now that Citigroup (C) has dropped below $1 in intraday trading, which bank could be next? That depends on whether financial stocks keep falling, but the number of analyst downgrades and first quarter write-offs could bring the sector down even further than it has already fallen.

Bank of America (BAC) could easily move below $1. Its 52-week low, which is near where the stock trades now, is $2.53. While the drop in Bank of America's stock is not as steep as Citi's over the last six months, it is close.

What would have to happen to take BAC down further? No much. If it posts large losses from its Merrill Lynch or Countrywide acquisitions, investors may see the new businesses as money pits. If the bank cannot say when the losses will end, investors who have not already hit the exits will clear out.

The federal government has already had to agree to back certain BAC assets. The amount of those assets is less than those the government has to back for Citi, but if Bank of America needs more buttressing of asset values, the stock could head south.

Finally, if the Treasury and Fed strike a deal with BAC to take a large ownership in exchange for more financial help and that will causes dilution in common shares, the price of BAC stock will almost certainly dive.

BAC is going to head toward $1. The question is whether it will get there.

Douglas A. McIntyre is an editor at 24/7 Wall St.

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