re:WFC 4:45 ET ******
WELLS FARGO & CO. (WFC) 260 UNCH. Given the back-up in rates today and the poor tone in the market in general, one issue that it bucking the trend is this commercial banking issue, one day after it lost $7 1/2 on confusion over whether Warren Buffett had sold his interest in Wells. The confusion over Mr. Buffett's holdings started when a filing with the SEC did not show any holdings of Wells Fargo by Mr. Buffett's Berkshire-Hathaway (BRKA) investment vehicle concern. This prompted the stock price to quickly drop by more than $14 as investors assumed that Mr. Buffett, a renowned value investor and a believer of owning a stock for long periods of time, had turned negative on the bank. However, what was not known at the time was that BRKA had requested confidentiality treatment for its position in Wells, meaning that it can prevent the public from discovering its stock position in the bank for as long as 15 months. Ironically, if Mr. Buffett indeed exit the stock, this delay in disclosure was probably done with the intention of preventing disorderly trading in the stock and provide Wells with additional time to get its house in order, given the problems the bank has faced incorporating its First Interstate acquisition. This did not happen, and instead bank officials were force to say that Berkshire-Hathaway remained a "substantial stockholder" in the bank in order to calm fears. But the confusion over the filing has probably scared enough investors to seek a different investment route, although the stock seems to have stabilized for the moment at this new price level. |
