Well Fargo (WFC) May Move to Wall Street Through Unconventional Method
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Price: $87.16 +0.29%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 2.3%
Revenue Growth %: +4.9%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 2.3%
Revenue Growth %: +4.9%
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Well Fargo (NYSE: WFC) appears to be the stock to beat these days.
Early reports this week suggest Wells Fargo will be having a record third quarter, with retail operations leading the way as other firms suffer on lower trading volumes.
And now, the bank may look to "occupy Wall Street." No protesting involved.
Wells Fargo is currently HQ'd in San Francisco, California... about 2,580 miles by air, 2,910 miles by land, and zero miles by teleportation.
The NY Times Tuesday mulled the idea of Wells Fargo getting to Manhattan not through the traditional method -- renting space -- but rather through M&A. The proposed target? Morgan Stanley (NYSE: MS).
NYT notes Morgan Stanley is a good fit on paper, allowing Wells Fargo to gain a tier 1 investment bank with low antitrust issues. Trimming 15 percent of combined brokerage costs would free up about $22 billion to shareholders, NY Times reports -- about 75 percent of Morgan Stanley's currently-deflated market value.
There would certainly be downside risks to such a move. An institution needs to increase buying and selling volume to prove it can move paper, but inventory risk then rears its ugly head. Further, Wells Fargo might need to do some international expansion, which would also increase the cost of doing business.
The bank hadn't even considered moving east of the Mississippi until the acquisition of Wachovia. But major financial institutions trading at two-to-three year lows might change that opinion.
Early reports this week suggest Wells Fargo will be having a record third quarter, with retail operations leading the way as other firms suffer on lower trading volumes.
And now, the bank may look to "occupy Wall Street." No protesting involved.
Wells Fargo is currently HQ'd in San Francisco, California... about 2,580 miles by air, 2,910 miles by land, and zero miles by teleportation.
The NY Times Tuesday mulled the idea of Wells Fargo getting to Manhattan not through the traditional method -- renting space -- but rather through M&A. The proposed target? Morgan Stanley (NYSE: MS).
NYT notes Morgan Stanley is a good fit on paper, allowing Wells Fargo to gain a tier 1 investment bank with low antitrust issues. Trimming 15 percent of combined brokerage costs would free up about $22 billion to shareholders, NY Times reports -- about 75 percent of Morgan Stanley's currently-deflated market value.
There would certainly be downside risks to such a move. An institution needs to increase buying and selling volume to prove it can move paper, but inventory risk then rears its ugly head. Further, Wells Fargo might need to do some international expansion, which would also increase the cost of doing business.
The bank hadn't even considered moving east of the Mississippi until the acquisition of Wachovia. But major financial institutions trading at two-to-three year lows might change that opinion.
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