Countrywide To Be Bought Out By Bank Of America

Heather said: "Today they announced that Countrywide is being bought out by Bank Of America for over 4 billion dollars in stock. [QUOTE]We believe this is the right decision for our shareholders, customers and employees," said Mozilo, chairman and chief executive of Calabasas, Calif.-based Countrywide (CFC) in a statement. Terms call for Countrywide stockholders to receive 0.1822 of a share of Bank of America (BAC) stock in exchange for each share they own. At Thursday's close, that values Countrywide at $7.16 a share -- lower than the $7.75 closing price after news leaked of a possible deal. [/QUOTE] Countrywide is trading for about $6.45 right now. What do you think of this purchase? Bank of America also gave the company 2 billion dollars a few months ago.. [URL="http://www.marketwatch.com/news/story/bank-america-buy-countrywide-financial/story.aspx?guid=%7B39417545%2D5DC7%2D4CD1%2D862D%2D5939F89D9667%7D&siteid=yhoof"]Yahoo News[/URL]"

lil dickie said: "After they put in that huge initial investment they must have thought it was necessary."

Airelon said: "Interesting move. I hold a lot of BAC actually, and I've thought about DCA'ing my position. Just gave me another reason to hold off on doing so. :)"

Aligator said: "We don't own BAC or Countrywide. But our money market funds (FDIC insured) are in Countrywide, which pays a fairly substantial 5.25%. Bank of America is on my "do not deal with them" list because of predatory practices that I find offensive, so I am torn as to whether to leave our funds where they are. I think I will do nothing for the time being."

JAP said: "BAC had no absolutely choice because CFC would've gone into bankruptcy. The CEO of BAC made a bad decision with that first 2 billion investment and is now trying to save face. Over the short term, this purchase is going to hurt BAC. It's going to take quite a while for this mess to shake out. 5-10 years down the road, BAC's purchase of CFC may be considered genius."

FirefighterB said: "They definitely got it at a substantial discount and one hell of a deal. The back office CFC operations are still worth quite a bit."