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 5/10 Good --- feeds.portfolio.com http://feeds.portfolio.com/portfolio/top5
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Tuesday, July 29, 2008 --- 32 days ago http://www.portfolio.com/news-markets/top-5/2008/07/28/Merrill-write-downs?rss=t
| Maybe it is time for John Thain to sell Merrill Lynch after all. On a day when investors sheared another 12 percent from its bloodied shares, his Merrill Lynch moved to shore up its flagging financial situation by issuing new shares and writing down another $5.7 billion in losses. It’s the latest in the desperate days of Thain —who about now must be fondly remembering grappling with NYSE specialists over trading fees—as he has tried unsuccessfully to stop the firm’s balance sheet hemorrhage. After the bell, Mother Merrill said it plans to raise $8.5 billion by issuing new shares and will take a write-down of $4.4 billion in addition to losses as high as $1.3 billion on bad trades, according to the Wall Street Journal . The stock issuance will dilute Merrill shareholders, potentially by as much as 25 percent of its current market cap. Merrill already has recorded $40 billion in write-downs, giving it a spot near to top of the list of credit crisis victims. The write-downs were primarily responsible for last week's $4.65 billion loss at the investment bank, according to the WSJ. Of the new stock, $3.4 billion was bought by Temasek Holdings, the Singapore state investment arm which has already invested $6.2 billion in the stumbling bull of Wall Street. All this comes in the wake of Thain’s resassurances about the things he wouldn’t do. At one point he said he wouldn’t sell off assets (he’s done that, dumping a 20 percent stake in Blo ... |
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