Filed under: Deals, Bank of America (BAC), Countrywide Financial (CFC)

With shares of Countrywide Financial (NYSE: CFC) trading at a 35% discount to the price that Bank of America (NYSE: BAC) has agreed to pay for the company, it appears that traders have substantial doubt about the deal’s prospects.

Of course, an FBI investigation into the company’s accounting is also doing little to boost investor confidence. If the company’s financial statements are misleading, Countrywide’s estimates of default rates could be off. And if they’re off by a lot, the company could be in big trouble.

One banker warned (subscription required) the Wall Street Journal that Countrywide’s financial position “isn’t a mark-to-market balance sheet,” which make the arguments of investors like Jon Wood that the company should be sold for something closer to its $22 book value irrelevant.

Continue reading Will Bank of America buy Countrywide? What if it doesn’t?

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This entry was posted on Wednesday, March 12th, 2008 at 2:38 pm and is filed under Stocks Money News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.