The Treasury Department will auction off 272.2 million warrants in Bank of America (BAC) on Wed. Previous TARP-related auctions proved to be lucrative for those willing to bet on JPMorgan Chase (JPM) and Capital One. JPMorgan Chase's (JPMorgan news) warrants rose more than 35 percent in the next month. Warrants from a Capital One auction rose more than 30 percent over the next month.

Some are predicting similarly strong demand this time, which has raised hopes that the sale will ultimately raise more than the Treasury asked Bank of America (Bank of America news) to pay. Recall it rejected the price, hence the auction. About 120 million of the warrants have an exercise price of $30.79, notes Bloomberg/Business Week. That's more than double Bank of America's current price.

Some tell the news service that whether the bank will restore dividends may be an issue with some buyers. The adjustment for higher dividends will be triggered only if dividends hit 32 cents per share; right now, the dividend is 1 cent. We'll just have to see how this turns out. The government would surely like to be able to claim that it's "investment" in Bank of America turned a really large profit. 

For more:
- here's the article 

Related Articles:
Moynihan honeymoon to last?
Judge Rakoff accepts Bank of America-SEC deal
So why did Bank of America fire its lawyer?
Credit card improvement at Bank of America?