NEW YORK - Investors appeared less than convinced about Washington Mutual Inc.'s assurances that it has enough capital to survive the banking crisis, sending the embattled bank's shares tumbling nearly 5 percent in premarket trading.
The announcement from the bank late Thursday that it has "sufficient liquidity and capital to support its operations while it returns to profitability" gave the stock a jolt, but trading in the premarket session Friday saw some of those gains evaporate. The stock slid 13 cents to $2.70 ahead of the opening bell after closing at $2.83 Thursday. It is down about 80 percent this year.
The Seattle-based bank made an appeal to the public late Thursday after its shares were hammered this week. It pre-released some third-quarter financial metrics -- nearly three weeks before the period even ends -- and insisted it has adequate capital to fund its operations even as it announced another multibillion dollar write-down on bad mortgage loans.
The company, like many other financial firms, has suffered from investments in risky mortgage securities and other assets.
Keefe, Bruyette & Woods analyst Frederick Cannon said the news made him "feel modestly better" about the company because the results were slightly better than his expectations.
Goldman Sachs analyst Brian Foran upgraded the stock to "Neutral" from "Sell," saying the company may have enough cash to avoid having to raise capital, possibly by selling shares. That would dilute the value of existing shares.