The news isn't that nearly bankrupt Washington Mutual (WM) fired CEO Kerry Killinger. What is of interest is how he inexplicably lasted so long.
In July, Washington Mutual posted a quarterly loss of $3.33 billion and said losses through 2011 in its one-family residential mortgage portfolio would probably be toward the high end of its prior forecast of $12 billion to $19 billion. Shares have fallen roughly 70% this year.
Earlier this year, the bank set plans to raise $7.2 billion from outside investors led by private equity firm TPG. It took that deal over a $7 billion takeover offer from JPMorgan (JPM). As part of Killinger's exit, the bank has been placed on probation by regulators.
With fellow CEO like Citi's (C) Chuck Prince, Merrill's (MER) Stan O'Neil, Wachovia's (WB) Ken Thompson, Bear Sterns' (BSC) Jimmy Cayne all seeing the exit door months ago, one can only wonder what those at WAMU were thinking?
Did they think Killinger could "pull it out" despite dramatically worsening results quarter after quarter? Did they really? Or, were they waiting for an assumed Fannie (FNM) / Freddie (FRE) action to coincide with their news? Who knows. Anything is just a guess and nothing is too crazy because the craziest thing is the fact Killinger is still even there to begin with.
No matter what the reason, at least it finally happened.
Disclosure: Long C, WB.