Wells Fargo (WFC)

Wells Fargo, like Ford, did not want government money, but was heavily encouraged to take the $25B bailout to stabilize its activities under the Troubled Asset Relief Program (TARP).^[1]

wells pre bailout dividend around .34 post bailout .05 they had a 3 b+ in profit for first quarter at that rate (even with the hiring freeze, read decline in services) it will take about 3 years of .05 dividend to pay the gov back, and with the exposure to commercial paper out look for that 3 billion profit doesn't look good, a passbook savings pays more. you are better off buying the preferred wells stock it still pays .50 a share dividend with the up side of wells

Wells Fargo, while a sizeable company in the U.S. market, has no international exposure, and is already limiting its domestic growth opportunities for the future. The overhead of the company is already bulky, and needs to be consolidated and simplified.

Wells has been quietly placing Wachovia managers into the wells system and buying out wells employees, it begs the question why replace good management with managers who almost sank the company you bought out. Units are being cut and relocated (why should i wait until the west coast office opens to get an answer, i live on the east coast). Staff reductions in a service industry is never a good sign.

Wells is set to write down almost 1.5 billion in bad loans in the commercial and consumer loan area and this is just the tip, as the next big write down will be in the home loan area.

Wells Fargo is limited in scope to the U.S. market. This means WFC does not have the international exposure that some of its competitors (notably Bank of America) have. This could be problematic if the U.S. market falters, because Wells Fargo does not have branches in foreign markets to diversify its business and reduce its risk.

WFC has raised over $12.6B in capital in order to acquire Wachovia. The company once stated that it had a more limited outlook for long-term growth. The former CEO Richard Kovacevich, who stepped down in June 2007, stated shortly before leaving his position that WFC is not interested in pursuing large acquisitions. The largest acquisition in recent years was the 2006 purchase of Greater Bay Bancorp for $1.66 billion. However, the acquisition of Wachovia strongly contradicts this sentiment and may put the company at increased risk in the turbulent market.

Wachovia wrote down a $11.2B loss in the 4Q 2008, while WFC wrote down $2.55B. Wachovia's assets are significantly worse than first expected from Wells Fargo's management.^[1]

WELLS HAS TOO MUCH HOME LOAN EXPOSURE IN THE CAL-NV-AZ STATES. HAS TO REVISE UP THE NUMBERS OF THE PLUS 120 DAY PAST DUE

The structure of Wells Fargo & Company is very complicated, and the 80+ businesses can easily seem uncoordinated and even disorganized to prospective customers and investors. The large number of distinct businesses also contributes to higher overhead costs than may be necessary. Although WFC has announced the "One Wells Fargo" initiative in an attempt to unify the company, the campaign has not produced any noticeable results and no concrete details for the plan have been released.