Topic: Growth Stocks

The Wall Street Stock Forecaster Hotline – Friday, April 11, 2008

Article Excerpt

WASHINGTON MUTUAL INC. $10.95, New York symbol WM, has obtained $7 billion of new capital from a group led by TPG Capital, a private equity fund. That’s equal to 70% of Washington Mutual’s current market cap of $10 billion. TPG will receive a combination of new common shares and convertible preferred shares that could nearly double the number of shares outstanding. The deal requires stockholder approval. Meanwhile, due to rising mortgage defaults and writedowns, Washington Mutual estimates it lost $1.1 billion or $1.40 a share in the three months ended March 31, 2008. To cut its exposure to the volatile real estate market, Washington Mutual will stop accepting new mortgages from brokers, and close all of its freestanding home loan offices. The company has also cut its quarterly dividend, from $0.15 a share to $0.01. It now yields just 0.4%. The dividend cut should save Washington Mutual $490 million a year. The extra capital will help Washington Mutual survive, and its focus…