Wells Fargo & Co. (NYSE: WFC) dodges difficult questions from investors and the press on a regular basis, and that silence is beginning to take a toll on the bank’s stock.
Wells has survived the financial crisis better than just about every other megabank, having acquired its deteriorating rival, Wachovia, at a deeply discounted price. The Wachovia merged made the bank a national leader in retail banking with more than 10,000 branches and $1.3 trillion in assets.
The bank’s heartiness hasn’t prevented its stock dropping sharply last week amongst a series of unfounded rumors. Wells Fargo’s stock dropped by about 6% in a day before the bank’s CEO, John Stumpf, said that the bank will not be raising any more capital to repay the loans that it had gotten from the government under the Troubled Asset Relief Program (TARP).
In a recent Wall Street Journal article, Frank Barkocy, director of research at Mendon Capital Advisors group stated, “They don’t go out of their way to keep the investment community fully informed. I think that tends to lead to some volatility in the stock.”
Wells Fargo is currently the only major bank that refuses to hold a quarterly conference call to discuss its earnings, at which tie investors could ask questions of company executives. Wells Fargo refuses to disclose its book value per share, a statistic that became a major focus during and after the financial crisis. Wells Fargo has also refused to say how well the troubled loans it picked up from Wachovia are performing.
