Sept. 11 (Bloomberg) -- Washington Mutual Inc., the largest U.S. savings and loan, tumbled for a third day on concern the lender may be forced to raise new capital to cover as much as $19 billion of losses.

WaMu fell 43 cents, or 19 percent, to $1.89 at 9:41 a.m. in New York Stock Exchange composite trading. Data from the exchange showed that bets on a falling stock price, or short sales, rose more for WaMu than any other company in the two weeks ended Aug. 29, measured by shares.

Investors pushed down shares of the Seattle-based company 30 percent yesterday and 20 percent on Sept. 9 on concern that their holdings may be diluted if WaMu seeks new capital. TPG Inc., the New York-based private-equity firm led by David Bonderman, led a $7 billion cash infusion in April.

``TPG will have to come forward again to put more capital into this company,'' Gary Townsend, chief executive officer of Hill-Townsend Capital LLC, said in a Bloomberg Television interview yesterday. ``As new capital comes in, you're likely to be further diluted.''

Short sales on WaMu, or bets on a falling stock price, rose by almost 44 million shares in the two weeks ended Aug. 29 to 382.4 million shares. That represents 26 percent of WaMu's stock available for trading.

Suitors walked away from a buyout this year because new accounting rules for devalued loans would saddle them with losses. At least three companies ended negotiations this year to buy either WaMu or Cleveland's National City Corp., two bankers familiar with the matter have said.

Washington Mutual needs to take ``drastic, timely action'' as soon as today or tomorrow, according to a report today from Egan-Jones Rating Co. The $7 billion ``infusion from Bonderman's TPG helps but is relatively small compared with Washington Mutual's $310 billion asset base.''

To contact the reporter on this story: Linda Shen in New York at lshen21@bloomberg.net

Last Updated: September 11, 2008 09:47 EDT