SHARES of Bank of America closed below $5 yesterday for the first time since the depths of the bear market in March 2009.
The stock closed at $4.99, down four per cent, after dropping as low as $4.92. Bank of America accounted for roughly six per cent of composite volume on the New York Stock Exchange, NYSE Amex and Nasdaq.
Financial institutions around the world have dropped in recent months on worries about the global economy and possible exposure to sovereign defaults in Europe.
Bank of America, in particular, faces concerns about whether it has enough capital to absorb mortgage-related losses and meet new international standards.
Investor Warren Buffett gave the shares a boost in August when he ploughed $5bn into the firm in a show of support for the bank’s stability and chief executive Brian Moynihan.
Buffett also has an agreement to buy 700m more shares at $7.14 each – meaning that at the current price, his warrants are $1.5bn underwater.
But the Sage of Omaha has ten years to exercise his warrants, giving him plenty of time to make money on his deal.