Cramer Says WaMu (WM) Should Trade at $9-$10 Max

On this afternoon's Stop Trading!, Jim Cramer and Erin Burnett discussed today's most heavily traded stock: Washington Mutual (NYSE: WM). Shares of Washington Mutual have fallen about 10% today on news that the Company will raise $7 billion through the sale of equity securities, cut its quarterly dividend from $0.15 to $0.01, and expects to report a Q1 loss of about $1.1 billion, or $1.40 per share.

Cramer told viewers that WaMu is still highly overvalued and should be trading in the $9-$10 range max. He said the Street isn't pricing shares of WaMu accurately due to overly optimistic investors who may not be recognizing the unfavorable terms under which the TPG deal was agreed upon, especially considering the large amount of dilution that will come with the infusion.

Washington Mutual, Inc., together with its subsidiaries, operates as a consumer and small business banking company in the United States. [BCS]

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