As Wells Fargo seeks a new CEO, it loses $24 billion in market value

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At Wells Fargo’s town hall meetings, executives have fielded countless questions from employees about efforts to resolve scandals that erupted almost three years ago. One looming topic hasn’t come up recently: Who will run the bank?

At Wells Fargo & Co.’s town hall meetings, executives have fielded countless questions from employees about efforts to resolve scandals that erupted almost three years ago.While the abrupt exit of Chief Executive Tim Sloan in March kicked off a succession hunt that has captivated the industry, an unexpected calm has taken hold inside Wells Fargo, according to people close to the firm. The rumor mill — once abuzz with talk of potential candidates — has quieted.

“It’s really hard to own the stock if there’s no long-term strategy being articulated,” said Brian Kleinhanzl at KBW. He downgraded the shares to “market perform” when Sloan announced his retirement. Altogether, only 31% of analysts covering the company recommend buying its stock, according to ratings tracked by Bloomberg. For JPMorgan, Bank of America and Citigroup, the percentage ranges from 49% to 90%.

Expenses were top of mind for investors when Wells Fargo posted quarterly results last month. On a conference call, executives predicted costs would be “relatively flat” in 2020 compared with this year. Under Sloan, the bank had said next year’s expenses would be lower.

 

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