Chase Makes Profit Again; Why Did Their Stock Drop?
I tell you, it’s so strange trying to figure out finances and the stock market sometimes. The story about JP Morgan Chase gives us a dichotomy of fortunes that are somewhat incomprehensible when you’re trying to understand how some of these people who play the stock market think.
Chase stated that they had a profit in the 4th quarter of 2009 of $3.28 billion dollars. That announcement made their stock price drop 2% on the day.
Okay, not only that bit of news. Investors were upset that the stock price didn’t hit 5 cents per share as a quarterly dividend. They’re upset that Chase is paying out $9.3 in bonuses. They’re upset that Chase lost over $300 million on credit cards. They’re upset that Chase was around $1.5 billion under the estimated revenue for the quarter. And they’re worried about the continuing mortgage industry’s slide, more foreclosures, and thus the potential for more losses to come.
I’m still thinking that wasn’t enough to make its stock price fall like it did. Chase only made $700 million in the 4th quarter last year when things were really bad. True, I’ve taken my shots at Chase here and there for what I consider as some customer unfriendly practices, and they still made a heck of a big profit, which will probably turn out to be one of the bigger bank profits announced when the other banks fess up eventually.
Are the days of faith in the big banks over?