Wells Fargo Quarterly Earnings Were Disappoint...As I Was Expecting
Wells Fargo reported their earnings on Friday. The numbers disappointed as expected (at least I did). They are still dealing with their account scandal shenanigans from months ago.
The Wells Fargo account fraud scandal is an ongoing controversy brought about by the creation of millions of fraudulent savings and checking accounts on behalf of Wells Fargo clients without their consent.
Wells Fargo clients began to notice the fraud after being charged unanticipated fees and receiving unexpected credit or debit cards or lines of credit. Initial reports blamed individual Wells Fargo branch workers and managers for the problem, as well as sales incentives associated with selling multiple "solutions" or financial products. This blame was later shifted to a top-down pressure from higher-level management to open as many accounts as possible through cross-selling.
Lets get to the numbers.
Wells Fargo said operating losses surged 77% last quarter because of various problems in its auto lending, wealth management, mortgage and currency businesses. Overall expenses rose by 3%. Meanwhile, Wells Fargo said profit declined by 12% during the second quarter, missing Wall Street's expectations.
I think Wells Fargo is the weakest big cap bank and the scandal was already priced into the number. I would not short this bank yet, wait for a pull back to the $58-$60 area before shorting the stock.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
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by rollandthomas
