Wachovia reported losses of $23.9 billion in the third quarter, a whopping hit of $11.18 per share that blew by analysts’ estimates of a 2-cent-per-share loss, reports Bloomberg. But Wachovia’s loss—virtually all tied to mortgages or mortgage-related securities—may be Wells Fargo’s gain.
New tax rules allow Wells Fargo, which agreed to buy Wachovia for $14 billion, to more easily absorb the losses. “The more losses the better off they are,'' an analyst tells Bloomberg. “It's kind of a free pass.'' Wells Fargo said the company is “on track” to complete the merger, which will help give it a nationwide presence.