Chase acquires Washington Mutual

Friday, September 26, 2008 - By Gate Arty

After months of speculation, Washington Mutual became the largest U.S. bank to collapse to date. Although WaMu shareholders have no reason to celebrate, those at JP Morgan Chase seized an opportunity. Chase bought WaMu’s $307 billion in assets and $188 billion in deposits for a mere $1.9 billion, which actually goes to the FDIC. The bank will also re-capitalize by selling some of its stock to raise $8 billion. JP Morgan Chase will now have 5,400 branches in 23 states. Wall Street’s reaction was positive on news of the acquisition, while shares advanced 10%. Investors believe the company continues to scoop up assets cheaply that will eventually provide substantial shareholder return. Once again, proving that those properly positioned in this market will succeed & seize investment opportunities. Top-to-bottom, investors large & small will buy assets that will eventually increase in value.

Tags: banks, business, economy, finance