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The Merrill Lynch Diet: Starving Shareholders |
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| Aug 04, 2008 02:40 PM UTC |
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Tracked Blogger
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7/29 - "I thought we were supposed to believe that Merrill Lynch’s (MER) selling a part of its Bloomberg stake and by taking $40 billion of writedowns this year alone, investors were (almost?) out of the woods. Guess again, news came overnight that Merrill will be selling more than $8 billion in new stock (read, diluting existing shareholders) at preferential terms to the Singaporean buyers of the last slug of stuck Merrill stuffed everyone with." "I may sound angry, but come on, guys. I don’t even own the stock but this is the fourth share sale this year and all along, management has said that it has sufficient capital. This is not a great way to treat existing shareholders, and certainly not enough to engender enough trust to lure new investors off the sidelines." 
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3 Related Views
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 N/A risk: moderate |
Merrill's Deals Have Some Scary Fine Print
7/29 - "First, there was the sale of $30.6 billion of toxic crap for 22 cents on the dollar ($6.7 billion). Merrill had already written this down to $11.1 billion, so that's only another $4.4 billion loss, but it comes only ten days after the firm said it had written everything on the balance sheet down to "market."...Second, Merrill is lending the buyer of the CDOs 75% of the money to buy them...
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47% risk: moderate |
Merrill Gets Positive Feedback from Analysts Following Recent Deals
7/29 - "Oppenheimer's Meredith Whitney notes this would reduce MER's CDOs exposure by $11.1 billion. While MER has significantly diluted existing shareholders, they applaud this purging of assets as an attempt to cut its losses and focus on stabilizing its platform and righting the franchise towards growth. While MER's stock still sells at a premium to book value and is expensive in firm's opin...
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N/A |
Merrill's Fund Raising Sets a Bad Precedent for the Financial Sector
7/31 - "You really can fool all of the people all of the time (or so it would seem). Writedown after writedown, lies and more lies: and yet, Wall Street believes in the Investment banks. The DJIA was up over 266 points yesterday!...Fool me once, shame on you. Fool me ten times, shame on me." Investors just don't seem to get it yet."
"Yesterday, a further $ 8.55 billion stock sale was announc...
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