Various media reports have claimed the prospective sale of Wells Fargo stock (NYSE: WFC) for a predicted amount of $3 billion. The sale of Wells Fargo stock which was considered only a rumor coming out of unidentified sources until now might well turn out to be true after Charlie Scharf, CEO confirmed that they are looking to cut their expenses significantly and review its objectives by selling off their business stock
Goldman Sachs as a Prospective Buyer of Wells Fargo Stock
There were rumors circling around the fact that earlier in the year, Goldman Sachs was in line to take over the entire Wells Fargo. While that news is still unconfirmed, Goldman Sachs would be more than likely to be interested if Wells Fargo Stocks are up for sale. Despite their enormous profit during the coronavirus pandemic, Goldman is thought to be very clear in its objective of diversifying its mix of revenue so that they remain in profit even when trading business and investment banking are not going strong.
Goldman is thought to be wary of Morgan Stanley who has recently taken over the stocks of E*TRADE along with Eaton Vance. After the takeover, Wealth and asset management are expected to be the major source of income. After carrying on the process to diversify its revenue for some years now, Goldman wants to follow the same route by taking over Wells Fargo stock. Currently, a revenue of 60% comes from the business of the global market. Only 26% of the total revenue comes from stock management while 14% comes from wealth and consumer management. David Solomon, CEO of Goldman, has confirmed in the third quarter that they are likely to spread their business in stock if it enhances the strength and the reach of the franchise.
While Goldman had reported a rough $1.5 trillion dollar worth of its stock with $2.8 billion total revenue for the 3rd quarter, Wells Fargo stock is predicted to reach a value of $607billion by the time the quarter ends. Their division of wealth and asset management produced net revenue of $3.8 billion making a profit worth $463 million in the 3rd quarter.
JP Morgan Chase as a Prospective Buyer of Wells Fargo Stock
JP Morgan Chase which happens to be the largest bank in the US can be another strong candidate to take over the Wells Fargo Stock. Jamie Dimon, CEO after reporting the bank’s earnings in the 3rd quarter, claimed that they would be more than open to acquiring new stock to consolidate their business. However, they refused to specify the details about the potential acquisition. Earlier in October, there were several reports claiming the rumored acquirement of Waddell and Reed by JP Morgan Chase, but having stocks worth only $70 billion, the firm lags behind the Wells Fargo stock.
The acquirement of Wells Fargo Stock by JP Morgan Chase would make more sense given the fact that there is a direct competition between them. Having offices and branches in similar locations, their clients would find this transition extremely smooth. Having shared a smooth working relationship, it is likely that Dimon and Scharf will come together to make the deal happen. JP Morgan’s division of stock management reported revenue worth $1.9billion for the 3rd quarter. Adding the revenue reported by the division of wealth management, JP Morgan has a net stock worth $2.6 billion