Regional Banks Spiral Towards Zero (Mike "Mish" Shedlock)

On Wednesday, BankUnited Financial Corporation Announced Public Offering of Stock.

BankUnited Financial Corporation (BKUNA) today announced the launch of a public offering of its Class A common stock, with gross proceeds of $400 million. The offering is expected to be pursuant to customary underwriting terms for a firm commitment offering of this type.

BankUnited expects to use the net proceeds from this offering for general corporate purposes, including contributing capital to its bank subsidiary.

This offering was not greeted with open arms to say the least. Bank United was crushed 33% ahead of the news (who knew?) and another 19% the following day. Its stock now sits at $1.90.

Why didn't Bank United raise capital at $31, $20, $14, or even $8?

It's market cap today is $68 million. Now it wants to raise $400 million which is 588% of what the market says it's worth. If that dilution comes on top of the declines we have already seen, its share price will be something like 32 cents.

Click for much more in-depth analysis and some absolutely damning financial statements and charts:

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Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. When not writing about stocks or the economy he spends a great deal of time on photography and in the garden. He has over 80 magazine and book cover credits. Some of his Wisconsin and gardening images can be seen at MichaelShedlock.com.