Unicredit Lost 30% Of Its Market Cap In Two Days

Tyler Durden's picture

When we presented the news about yesterday's UniCredit rights offering we said that "a UniCredit €7.5 billion new stock issue pricing at a whopping 43% discount to market price shows that fair value of actual demand for European banks is about half of where the artificially propped up price is." Sure enough the market appears to have taken testing this assumption to task, and in the past two days 30% of the entire market cap of UniCredit has been destroyed. And what makes this otherwise sad development for many people, who had previously been fooled by various governments in believing that asset values are fair and could thus rise when in reality everything has been distorted and manipulated beyond comprehension, simply hilarious is that not even a month ago UniCredit did a one for ten reverse stock split. At this rate another reverse stock split is imminent before next week is over. Which is to be expected: after all prices are determined on the margin and are a function of systemic liquidity, which in Europe no longer exists in free form. US readers be advised: discoveries such as this one are coming to the US very soon.

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ucsbcanuck's picture

Hopefully the first discovery is BAC


- April 2012 puts, strike price $4

- August 2012 puts, strike price $6

J 457's picture

Sorry, both will expire worthless.  Do you really think Obama's Buffet will allow BAC to drop below $4?  Something must be brewing for this to run so far so fast.  I'm sure we'll know in the next few weeks.


lotsoffun's picture

buffett wanted into to the political circle.  he was told to pony up.  buy bac.  he was promised by OBG (obama, geithner, bennie) he wouldn't lose a penny.  he was starting to get annoyed.  he was losing big time.  he won't lose a cent.  the 1.2 trillion rumor is true and simple.  bac is going to bankrupt the countrywide wing and the fed will buy it up.



J 457's picture

BK CW or just have FED buy more MBS from BAC, taking the toxic loans and handing them to FNM (taxpayer) to absorb the loss over the next 10 years.  Buying the MBS will be more politically acceptable and serve the same purpose. 

Buck Johnson's picture

I agree, something must be brewing.  Because if Band of America to go it will bring the whole system down.  Heck everyone knows that BOA is essentially insolvent and the only thing holding it up is the US and the other banks.

ucsbcanuck's picture

I didn't put a whole lot into it - but why wait for expiry anyway? Just need it to appreciate enough then get out.

ucsbcanuck's picture

I didn't put a whole lot into it - but why wait for expiry anyway? Just need it to appreciate enough then get out.

ucsbcanuck's picture

Plus check out who underwrote Unicredit. BAC. Also the mortgage refi rumour is a crock.

ZeroPower's picture

Syndicate buddies - merely scratching each other's back.

StychoKiller's picture

Is that what you kids call it nowadays? :>D

CClarity's picture

Didn't Citi already do a 10 for 1?

rcintc's picture

Strike that, reverse it.....1 for 10.

catacl1sm's picture

Price Discovery, bitchez!

CClarity's picture

Thinking Unicredit was smart, despite difficult terms, to get their capital raise ahead of the other banks and crushing sovereign rollovers.

Irish66's picture

Coming to the US, the blow horn has now convinced me we have decoupled.  sarc

Gubbmint Cheese's picture

the one year Bund continues to flash red to anyone who cares to listen.. http://www.bloomberg.com/quote/GDBR1:IND

Stuck on Zero's picture

It's so distressing that the CEO wants a $30 million bonus.

Fips_OnTheSpot's picture

inflation is every where - even in reverse splits :)

smlbizman's picture

man im glad our banks are rock solid.....

StychoKiller's picture

My gall bladder was solidly filled with rocks -- had to get it removed.  Draw yer own conclusions, "Early." (Love those Squidbillies)

StychoKiller's picture

Heartwarming -- now watch some prick ambulance chaser sue her for wrongful death of his/her client.  (Sorry, feeling extremely cynical!)

hugovanderbubble's picture

Deutsche Bank


Banco Santander





Caixa Geral



Societe Generale

Credit Agricole

will be the next ones to drop like stones...






+Overleverage of Chinese ones,


banking system gonna explode in 2012

hugovanderbubble's picture

Banco Santander will need to raise 12.000 Mn Euros to cover hybrids fraud and real estate exposure 

-That means crashing till 2.80 euros per share,

hugovanderbubble's picture

BBVA 7.390 Mn Euros 31% dilutive

3.55 euros per share

lolmao500's picture

If Unicredit blows, we're pretty much screwed.

PontifexMaximus's picture

Famo il conto della serva: you take the actual price of UCG, add 2 x EUR 1.94 and divide it by 3, new price target, without Harvard or Bocconi. Let's see what's happening after Monday, 9th.

ebworthen's picture

BAC and other banking stocks being pumped up on low volume by HFT's to bring in "value" investors; so they can be dumped by the HFT's shortly thereafter.

Don't buy financials, period.

Normalcy_Bias's picture

But...But... the big question is when will TD's favorite Chiswick resident, the one and only Erik Nielsen, receive his P45 once Unicredit implodes.






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Mentaliusanything's picture

Fuck off spammer

Your cheap shit is staining this site and my underpants

el-kalif's picture

interesting how Bank of America and Unicredit perf are correlated 

Mentaliusanything's picture

10:1 stock split ...... should have been a thousand and it still would be a penny dreadful.

This turkey is cooked.