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Updated from Thursday, May 7

Wells Fargo

(WFC) - Get Wells Fargo & Company Report

on Friday priced a larger-than-expected $7.5 billion public offering, its first step to addressing the $13.7 billion capital hole government stress test results released Thursday identified.

Wells said it was offering 341 million shares of its common for $22 per share, in a deal expected to close by Wednesday. Underwriters J.P. Morgan Securities and Wachovia Securities will have a 30-day option to purchase up to an additional 51.150 million shares of common stock to cover over-allotments.

The offering is larger than the $6 billion the company said it would raise on Thursday, just ahead of the government's announcement of the stress test results.


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also announced stock offerings Thursday to address capital shortfalls identified by the stress tests.

Shares of Wells Fargo were falling 3.5% $23.89 in recent trading.

Investors and observers had been speculating for weeks about whether -- and then how much -- capital Wells would be deemed to need. Regulators performed "stress tests" on the firm, along with 18 other banks, to determine how much capital they would require under different economic scenarios.

Despite record first-quarter earnings and assertions by management that the bank was on solid capital footing, reports first surfaced earlier in the week that Wells would indeed need additional funds. Wells executives have said repeatedly that they could have raised private capital without the government's initial $25 billion TARP injection, and Chairman Richard Kovacevich assailed the stress test as "asinine" earlier this year.

Wells' capital needs were tightly held until Wednesday evening, when the

Wall Street Journal

and others cited anonymous sources who said Wells would need $13 billion to $15 billion in additional funds.