Is Sovereign Bank on death row as well?

Despite the ban on short-selling of financial stocks, Sovereign Bank, my new bank, saw its stock fall by a jaw-dropping 72% today. I do not own any stock in Sovereign Bancorp (SOV) and I have less than $100,000 in assets with them so I am 100% protected, but there is actually now a very real chance that they could go under, meaning that the FDIC would move all of the assets to a stronger bank.

I searched the news and could not find any fundamental reason for their decline. I also suspect that there are too many loopholes in the short-selling ban to rule out a bear attack.

The big concern (not mine, though) is that a plummeting bank stock can also trigger a run on that bank.

Actually, tomorrow morning I am going to transfer a pile of cash to Sovereign Bank to keep in a money market fund (earning 2.75% APY). I intend to go ahead with that transfer since I will be 100% FDIC protected.

In short, I know of new fundamental reason not to continue doing business with Sovereign Bank.

Whether their stock might be a good speculative play is another story and I have to admit that I do not have a solid clue as to the specific motivations of the sellers.

-- Jack Krupansky