Washington Mutual (WM) issued quite a press release after the close yesterday.
Here is what they said they are going to do to shore up their capital base and their business:
- Cut their quaterly dividend from 56 cents to 15 cents
- Issue $2.5 billion preferred stock
- Discontinue subprime lending
- Cut 2,600 jobs (approx. 22% of division total) from their Home Loan division
- Cut 550 corporate and support positions
- Take a $1.6 billion writedown related to the repositioning of its Home Loan business
All of this is good stuff and probably the right response to what is going on. It will allow them to position themselves for the stormy seas ahead and come out the other side.
WaMu’s shares are the most actively traded on any stock exchange this morning, down more than 8% on volume around 47 million shares.
That said, if you look at the chart, how the stock is acting this morning and the extreme measures they are taking, it is starting to look like a bottom to me.