Wells Fargo’s Path to Recovery
In general, buying a company’s stock is a vote of confidence, something investors do when they think a company is poised for great, money-making things. But when a company executive buys stock, particularly amid a corporate meltdown, it is often an attempt at reassurance or damage control. Wells Fargo’s top executives have recently made such a move.
On Monday, following the company’s and the of a lengthy probe into the firm’s notorious fake-account scandal, Wells Fargo’s new CEO Tim Sloan, along with the company’s chairman Stephen Sanger, bought more than of the company’s stock. (Wells Fargo declined to comment for this article.) That might be because by many accounts, the first quarter earnings report showed that the company’s recent scandals had in fact hit its bottom line. The company’s profit was around $5.5 billion, showing no growth from the year prior, while net income at the Community Bank—the division responsible for the fake accounts—declined 9 percent. And revenues for the company dropped $200 million from the previous year, missing analysts’ expectations. Fewer new credit cards were opened, too. Those are by no means apocalyptic declines, but for one of the largest and most successful banks in the country, flat or downward performance is notable, particularly as competitors including and posted much more robust growth.
