BamBam

Eight Reasons Bank of America Is Going to $20

I suppose there's an outside chance that these big banks could get through the next few years without fatally diluting existing shareholders. This optimistic scenario would rely on very generous terms as part of the gov't bailout...perhaps convertible securities specifically designed to allow company managements time to sell assets and minimize dilution. It would require a large and aggressive "bad bank" paying top dollar for illiquid assets.

It's not enough to say that nationalization is off the table. If you're looking at the common stock, you've got to make a case or present a scenario in which existing shareholders are not terribly diluted.

Unfortunately, despite the author's optimism, he make no such case. There is absolutely no rigor to this argument.