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Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives -- Ignore unavailable to you. Want to Upgrade?

To: GROUND ZERO™ who wrote (90263)	3/3/2017 4:38:01 PM
From: Katelew	Read Replies (2) \| Respond to of 218589

The statement says they are planning to raise capital and it could be 'substantial capital'. Typically this is done by issuing debt (bonds), selling more common stock, selling rights and/or warrants, or some combination of these. If it's done with common stock, it is considered "dilutive", meaning that the earnings per share would drop because now there are more shares to divide earnings into. Lower EPS, earnings per share, could cause some investors to sell, esp. institutional investors. Only time will tell because it all depends on the size of the effort to raise capital and what form it will take. Typically this kind of announcement creates a drag on the stock, or a kind of cloud, until the details are announced. But we're in a bull market, and bull markets cover all kinds of sins, so the stock could just chug higher. It's definitely something, though, to watch. Especially with regard to what it is they are raising capital for. If it's money for expansion, that might be bullish. But if it's money just to clean up the balance sheet and satisfy regulators, that's not bullish. Not neccessarily bad, esp. in the long term, but it's not really favorable. Generally speaking, all of the major European banks are considered to still be behind where ours are in terms of strengthening their balance sheets from the damage done ten years ago. So maybe that's a negative. OTOH, the economy appears to be strengthening in Europe right along with ours, so DB may become one of the best bets around. It's hard to say. I actually have my eye on one--Banco Santander (SAN), under $6 a share. Earnings rising, no need to raise capital and just got approved to pay dividends in the USA. But it has other risks unique to it alone....like it's exposure to Mexico. And then there's always the possibility of the EU coming apart, lol. Seriously, and I hate being a drag, but investing in any European bank is still a little problematic, imo. I think your other bet, the money in FAS, is a no brainer though. It should do well. How does DB look to you and the other tech gurus from a purely technical viewpoint?