NEW YORK ( TheStreet) -- Call them savvy, or maybe just lucky, short sellers who stepped up their bets against Bank of America (BAC) rejoiced as shares of the Charlotte, N.C., giant hit their lowest price since May 2009 amid suspicions it may be the next target of WikiLeaks.
Bank of America has seen its shares battered in recent weeks as the bank some call the Wal-Mart (WMT) of banking has been at the eye of the storm over what it admitted were sloppy foreclosure practices. Investors are also concerned about larger-than-expected "putbacks" on billions of dollars in mortgage backed securities Bank of America created and sold to investors.
Bank of America had shown signs of recovering from the selloff. After losing some 15% during a few days in mid-October, Bank of America's stock price recouped some of that ground earlier this month as analysts like Morgan Stanley's Betsy Graseck began pounding the table on the stock, suggesting the selloff was overdone.
Short sellers appeared to agree with Graseck. They ratcheted back their bets against Bank of America at the end of October.The mortgage-related fears persisted, however, as a Nov. 20 report from Compass Point Research & Trading, highlighted by Barron's, argued Bank of America may face $35.2 billion in mortgage putbacks-- more than Citigroup (C), Morgan Stanley (MS), Wells Fargo (WFC)and Goldman Sachs (GS)combined. Then, late Monday, Forbes published an interview with Julian Assange in which the WikiLeaks founder boasted that his next bombshell would involve "a major American bank," and provide "a true and representative insight into how banks behave at the executive level." Assange said he "presume
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