Bank of America (NYSE:BAC) Bailout Warrants Surge 33% in 3 Weeks

Friday, March 26th, 2010

Bank of America (NYSE:BAC) warrants auctioned off by the government for $2.55 each in relationship to the bailout, have surged by 33 percent over the first three weeks they've been trading, making investors very happy.

The Group B warrants added another 12 cents today to reach as high as $3.40 yesterday on the New York Stock Exchange, and Group a warrants, while not doing quite as well, still have given a nice return to those investing in them, closing Thursday at $9.53, a 14 percent gain over the $8.35 paid for each warrant.

The 10-year warrants were sold for $1.57 billion, breaking previous all-time records for a warrant issuance. They were sold to pay back some of the money received from the Troubled Asset Relief Program (TARP) from taxpayers.

Those winning the auction correctly predicted the price of the warrants would increase quickly as that was the way warrants from the auctions held by JPMorgan (NYSE:JPM) and Capital One, which increased 30 percent over the first 30 days they were held.

Bank of America itself has done very well since the warrant auction as well, with common shares since that time climbing by 8 percent. For those holding warrants and common shares in Bank of America, they've had a tremendous month.

Article by Gary B

The views expressed are the subjective opinion of the article's author and not of

Tags: bank of america , jp morgan , treasury , warrants

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