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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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Thu, 01/05/2012 - 16:59 | 2036799 ucsbcanuck
ucsbcanuck's picture

Hopefully the first discovery is BAC


- April 2012 puts, strike price $4

- August 2012 puts, strike price $6

Thu, 01/05/2012 - 17:11 | 2036874 J 457
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.


Thu, 01/05/2012 - 18:21 | 2037222 lotsoffun
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.



Thu, 01/05/2012 - 19:11 | 2037390 J 457
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. 

Thu, 01/05/2012 - 19:30 | 2037434 Buck Johnson
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.

Thu, 01/05/2012 - 19:47 | 2037476 ucsbcanuck
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.

Thu, 01/05/2012 - 19:57 | 2037498 ucsbcanuck
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.

Thu, 01/05/2012 - 21:02 | 2037632 ucsbcanuck
ucsbcanuck's picture

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

Fri, 01/06/2012 - 03:28 | 2038313 ZeroPower
ZeroPower's picture

Syndicate buddies - merely scratching each other's back.

Fri, 01/06/2012 - 03:40 | 2038325 StychoKiller
StychoKiller's picture

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

Thu, 01/05/2012 - 18:10 | 2037176 CClarity
CClarity's picture

Didn't Citi already do a 10 for 1?

Sun, 01/08/2012 - 00:51 | 2043409 rcintc
rcintc's picture

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

Thu, 01/05/2012 - 16:59 | 2036802 catacl1sm
catacl1sm's picture

Price Discovery, bitchez!

Thu, 01/05/2012 - 16:59 | 2036803 kaiserhoff
kaiserhoff's picture


Thu, 01/05/2012 - 16:59 | 2036805 CClarity
CClarity's picture

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

Thu, 01/05/2012 - 17:00 | 2036807 Irish66
Irish66's picture

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

Thu, 01/05/2012 - 17:01 | 2036810 Gubbmint Cheese
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

Thu, 01/05/2012 - 17:01 | 2036811 Stuck on Zero
Stuck on Zero's picture

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

Thu, 01/05/2012 - 17:03 | 2036821 847328_3527
847328_3527's picture

$30 Million? Why not $50?

Thu, 01/05/2012 - 17:01 | 2036812 Fips_OnTheSpot
Fips_OnTheSpot's picture

inflation is every where - even in reverse splits :)

Thu, 01/05/2012 - 17:02 | 2036818 smlbizman
smlbizman's picture

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

Fri, 01/06/2012 - 03:42 | 2038326 StychoKiller
StychoKiller's picture

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

Fri, 01/06/2012 - 03:44 | 2038329 StychoKiller
StychoKiller's picture

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

Thu, 01/05/2012 - 17:19 | 2036887 hugovanderbubble
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

Thu, 01/05/2012 - 17:14 | 2036898 hugovanderbubble
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,

Thu, 01/05/2012 - 17:15 | 2036902 slewie the pi-rat
slewie the pi-rat's picture

we have been warned

Thu, 01/05/2012 - 17:16 | 2036907 hugovanderbubble
hugovanderbubble's picture

BBVA 7.390 Mn Euros 31% dilutive

3.55 euros per share

Thu, 01/05/2012 - 17:28 | 2036973 lolmao500
lolmao500's picture

If Unicredit blows, we're pretty much screwed.

Thu, 01/05/2012 - 17:30 | 2036985 PontifexMaximus
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.

Thu, 01/05/2012 - 17:31 | 2036993 ebworthen
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.

Thu, 01/05/2012 - 20:14 | 2037534 ucsbcanuck
ucsbcanuck's picture

Agreed, thanks.

Thu, 01/05/2012 - 17:45 | 2037064 Normalcy_Bias
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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Fri, 01/06/2012 - 05:35 | 2038531 Mentaliusanything
Mentaliusanything's picture

Fuck off spammer

Your cheap shit is staining this site and my underpants

Fri, 01/06/2012 - 04:50 | 2038503 el-kalif
el-kalif's picture

interesting how Bank of America and Unicredit perf are correlated 

Fri, 01/06/2012 - 05:33 | 2038526 Mentaliusanything
Mentaliusanything's picture

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

This turkey is cooked.

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