WaMu Looking to Escape

Beleagured nationwide commercial bank Washington Mutual, or WaMu (WM - Snapshot Report) is reportedly interested in being sold.  Probably more importantly, there do seem to be viable suitors out there who are interested in buying.  The New York Times talked about Wells Fargo (WFC - Analyst Report) and Citicorp (C - Analyst Report), in particular.

Stepping out of the way when it could have made trouble for a deal it made just before WaMu went on red alert, investment firm TPG has decided to honor the $7 billion influx to the bank.  An AP report this morning mentions that a failure of Washington Mutual could cost the FDIC north of $20 billion.  Where money like that will come from at this point, who really knows?

So there is motivation for other firms to step in and buy WaMu outright before it crashes and all that's left are little pieces.  WM shares are down 85% year-to-date.  The September quarter is expected to post -$1.14 per share according to the Zacks consensus, and the fiscal 2008 number is currently -$6.60 per share.

Zacks senior analyst Eric Rothmann has already advised investors take profits on WM shorts.  No longer-term investor should be anywhere near owning this right now; of main interest is whether or not it will be spared, and how.