Bradford & Bingley shares tumble again
(Telegraph) -- Bradford & Bingley shares tumbled to new lows today, dropping further below the 55p-a-share price of its £400m rights issue, as the City speculated that the buy-to-let lender is worthless.
The group's stock plunged more than 22pc to just 32.5p in early trading this morning. The slide follows a wave of investor concerns yesterday, after Pali International, a stockbroker, cut its target price for the bank to "zero" and calculated B&B's "net present value" to be -14p. In a separate note, banking specialist Fox-Pitt, Kelton said: "We cannot rule out the possibility of an effective failure with shareholders receiving little or nothing for their shares."
This came in the wake of last week's Moody's downgrade and decision by TPG to pull its planned £179m investment. In frantic efforts to keep B&B's capital raising on track, four of its core shareholders stepped in to support an enlarged £400m rights issue alongside the six largest high street banks.
Leigh Goodwin, an analyst at Fox-Pitt, reduced his share price target to 43p, is "forecasting losses by 2010" and raised questions about whether "B&B is going to be Northern Rock in slow motion".
He added: "The downgrades and publicity surrounding the stock will almost certainly lead to increased funding and liquidity pressures."
The group's stock plunged more than 22pc to just 32.5p in early trading this morning. The slide follows a wave of investor concerns yesterday, after Pali International, a stockbroker, cut its target price for the bank to "zero" and calculated B&B's "net present value" to be -14p. In a separate note, banking specialist Fox-Pitt, Kelton said: "We cannot rule out the possibility of an effective failure with shareholders receiving little or nothing for their shares."
This came in the wake of last week's Moody's downgrade and decision by TPG to pull its planned £179m investment. In frantic efforts to keep B&B's capital raising on track, four of its core shareholders stepped in to support an enlarged £400m rights issue alongside the six largest high street banks.
Leigh Goodwin, an analyst at Fox-Pitt, reduced his share price target to 43p, is "forecasting losses by 2010" and raised questions about whether "B&B is going to be Northern Rock in slow motion".
He added: "The downgrades and publicity surrounding the stock will almost certainly lead to increased funding and liquidity pressures."