Wachovia’s new chief executive officer’s purchased of one million shares ($16.1 million) on the same day that Wachovia announced a second quarter loss of $8.9 billion, cuts in workforce and dividend. President and CEO Robert Steel took over the CEO spot July 9.  In the last 12 months, shares have plunged 63.9%, while the Dow Jones U.S. Banks Index tumbled 36.9%. Year-to-date, Wachovia has fallen 53.6% to the Index’s 19.1% slide.

If you think the worst is over,  the buy should make you feel good about Wachovia. But if you think the worst is not over, well…then it doesn’t matter.  However, $16 million is a huge investment to make, even if you are the new CEO with a huge payday if you succeed.  He could have invested $2 million and made most investors happy.

The company reduced its quarterly dividend for the second time this year, to five cents  versus 64 cents in January — and announced it planned to eliminate more than 10,000 jobs.  It looks like Steel is doing everything right, and with a network that can only improve with investments (in the branches), Wachovia is poised to make a comeback.

Track CEO and officer purchases at:

http://dev.trackthepros.com/stocks/category/661