The Short Squeeze Is On In Shares of BankAtlantic

Nov 1, 2011
J. Webster
Comments Off on The Short Squeeze Is On In Shares of BankAtlantic

There was a rush to the exits for all the shorts in BankAtlantic after BB&T agreed to pay $301 million to acquire roughly $2.1 billion in loans and $3.3 billion in deposits from BankAtlantic. And it was a huge short squeeze as nearly 90% of the float was short BankAtlantic’s stock.

At one point shares of BankAtlantic (BBX) shot up to $7 a share this morning, as the shorts were forced to buy back shares if they wanted to get out. The stock is now trading around $4.85 a share, just under an 85% increase from yesterday. Here are the details from DealBook:

BB&T agreed to buy only the best assets from BankAtlantic, declining to take on nonperforming and other “criticized assets,” according to a BB&T statement. That leaves BankAtlantic’s parent company, BankAtlantic Bancorp, holding $623.6 million in assets, more than half of which are troubled loans.

“This acquisition of BankAtlantic is a compelling strategic expansion into important long-term markets in Southeast Florida,” Kelly S. King, BB&T’s chairman and chief executive, said in the statement. He also highlighted that the deal “expressly excludes nonperforming and other criticized assets, as well as other risks, which satisfies our criteria with respect to risk management.”

BankAtlantic Bancorp’s chairman and chief executive, Alan B. Levan, acknowledged that the deal featured a “very unique structure.” Still, he said, “with the strength of BB&T, one of the nation’s largest financial holding companies, we are confident that BankAtlantic’s customers and employees will be served well by this transaction.”

Related Posts Plugin for WordPress, Blogger...

Comments are closed.