Wachovia's Remnants Hard to Value

Marquardt adds that Wachovia's remaining businesses have "much uncertainty" surrounding them, including near- and long-term earnings power and the risk of client attrition for its retail brokerage and asset-management units, especially with Evergreen.

On the same day Wachovia shares plunged, the markets overall tanked. The Dow Jones Industrial Average fell nearly 800 points following the news that the U.S. House of Representatives failed to pass the bailout proposal in which the government would purchase roughly $700 billion in troubled assets, among other things. Stocks recouped much of those losses on Tuesday following renewed optimism about the prospects for a new bailout package.

Wachovia's stock closed up 90% to $3.50 on Tuesday. Wachovia also issued a statement slightly after midday saying the company "remains well capitalized" following Monday's sale announcement.

The holding company is supporting its operating subsidiaries, it said.

"Wachovia is in a strong position to provide credit support and overall capital backing to key businesses, including retail brokerage, asset management, retirement services and capital markets," it said. "In addition, the Federal Reserve Bank stands ready to provide liquidity as needed."

The Charlotte-based company also noted that Citi's use of government assistance in connection with its acquisition "is not dependent on the financial services relief plan legislation the U.S. Congress has been considering."

Wachovia spokeswoman Christy Phillips-Brown says the statement was meant as "a reassurance" to investors that the remaining company does indeed have adequate capital.

"Obviously this [deal] came together fairly quickly," she says. "We are working towards providing more information," to various investors and other parties.