Monday, December 19, 2011

Bank of America Falls Below $5 — Monday’s IP Market Recap

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tdp2664 InvestorPlace It's been a year of bumpy roads for banking giant Bank of America (NYSE: BAC ), and Monday saw BofA stumble over another pothole. BofA shares sunk below $5 per share — $4.92 at one point — their lowest value in more than two years, since the depths of the financial crisis. Stocks that fall below $5 run certain dangers: Some mutual funds won't hold them, and some brokers won't allow investors to buy or short sub-$5 stocks on margin. However, the low point is merely a continuation of a yearlong trend that has seen BAC shares shed more than 60% of their value. Less than two months ago, shares were selling at less than $7 and some were calling that a floor, believing BofA to be a bargain. However, numerous business and financial problems — as well as the constant seesawing on Europe's daily headlines — meant the stock still was an enormous risk in the short term . Since that point, BAC shares have shed more than 25%, and BofA ended Monday down 4% at $4.99. Bank of America had plenty of friends to commiserate with Monday. Citigroup (NYSE: C , -4.65%), JPMorgan (NYSE: JPM , -3.73%), Goldman Sach s (NYSE: GS , -2.66%) and Wells Fargo (NYSE: WFC , -2.58%) all sold off in kind. Also later Monday, AT&T (NYSE: T ) announced it would end its nine-month-long bid for the No. 4 U.S. telecom, T-Mobile USA. The deal had run into opposition from the Federal Communications Commission and the Department of Justice in the past few months. AT&T will suffer a $4 billion pretax accounting charge for the fourth quarter because of the breakup, and T shares were sliding slightly in after-hours trading, down 0.5%. Social gaming company Zynga (NASDAQ: ZNGA ) continued to slide for the second trading day since its initial public offering . After ending Friday down 5% from its offering price of $10, it shed close to another 5%, ending Monday at $9.05. The company faces numerous doubts, among them the ability to recreate blockbuster games like FarmVille and Mafia Wars , which have seen monthly user numbers rapidly decline of late. Looking further and further away from going public is Twitter. On Monday, Saudi Prince Alwaleed bin Talal announced he bought a $300 million stake in the social networking company, adding Twitter to an investment portfolio that includes large holdings in Apple (NASDAQ: AAPL ), Citigroup and News Corp. (NASDAQ: NWSA ). Three Up VirnetX Holding (AMEX: VHC ): Up 17.7% ($3.76) to $25. LDK Solar (NYSE: LDK ): Up 11.24% (50 cents) to $4.95. Elan (NYSE: ELN ): Up 6.35% (75 cents) to $12.57. Three Down Eldorado Gold (AMEX: EGO ): Down 13.62% ($2.04) to $12.94. ( Read more about Eldorado here. ) Delta Air Lines (NYSE: DAL ): Down 5.65% (51 cents) to $8.51. General Motors (NYSE: GM ): Down 5.46% ($1.10) to $19.05. As of this writing, Kyle Woodley did not hold a position in any of the aforementioned stocks. Check out our list of previous IP Market Recaps .



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