The Stock Market Was Right About Wells Fargo (WFC): It Cuts Dividend

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By Douglas A. McIntyre Updated Published

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Wells Fargo (WFC) is supposed to be one of the healthier big banks. The market has not treated that way, driving its shares relentlessly lower–down 40% over the last five trading days which is about the same as Citigroup (C).

It turns out things were not so good at WFC. It cut its dividend this morning and said the move would save $5 billion. The firm obviously thinks it will need the money now. Or, maybe it just wants a rainy day fund.

The bank said it would cut its quarterly pay-out to $.05 from $.34.  WFC made one comment that should raise some concern.  “Our merger with Wachovia is on track and we remain as optimistic as ever about its potential benefits for all our stakeholders.” The bank might have used stronger language about the future of the marriage.

Douglas A. McIntyre

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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