Marketwatch kept reporting that MER was down 10% on no news, yeah right, 'we dont need more capital' 'sorry, $8.5b in common stock,ok now we dont need more'. Looks like the SEC have more work to do on that rather than to try to create short squeezes to prop up banks
Cough cough....yeah we need another $8.5B. http://www.bloomberg.com/apps/news?pid=20601087&sid=a.qIMphkb5cA&refer=home Merrill Has $5.7 Billion of Writedowns, Sells Shares (Update1) By Bradley Keoun and Christine Harper July 28 (Bloomberg) -- Merrill Lynch & Co. said it will record $5.7 billion of pretax writedowns in the third quarter because of additional losses on the sale of collateralized debt obligations and hedging contracts with bond-insurers including XL Capital Assurance. The New York-based firm said today in a statement that it plans to raise $8.5 billion by selling shares in a public offering. Temasek Holdings, the Singaporean government investment fund that already is one of Merrill's biggest investors, will buy $3.4 billion of stock in the offering, Merrill said. Merrill Chief Executive Officer John Thain is pushing to rid the firm of its CDOs, which have contributed the majority of $18.7 billion of net losses reported over the past four quarters. Thain has had to raise capital to stave off credit- ratings downgrades and satisfy regulators that the firm can withstand losses. ``It does mark an attempt at curing the problem but at a tremendous cost to existing shareholders,'' said Charles Peabody, an analyst at Portales Partners LLC in New York who recommends selling the shares. ``You're going to raise $8.5 billion in capital. How can you be pleased by that? It's a necessity.'' Merrill said it sold $30.6 billion of CDOs to an affiliate of the Dallas-based investment firm Lone Star Funds, resulting in a pretax writedown of $4.4 billion. Merrill will provide financing for about 75 percent of the purchase price, according to the statement. Merrill has lost almost 55 percent of its market value this year. The shares fell 12 percent in New York Stock Exchange composite trading today.
It's carrying the loan for 75% of the sale to Loan Star and they suckered some more furriners in Singapore into buying their stock? 6 months and Lone Star give it back to them. F'ing shell game is all it is. The ship is sinking and they're rearranging the deck chairs.
classic. Finally seeing what's left on the beach after the bond insurers tide went out. Everyone else wil probably fall in line now and raise cap. The overhead going forward will haunt these stocks for years. if they do the financing @ 20 a share that will add 425 mil shares to 1 bil share o/s rofl. but wtf do they care? they already banked HUGE on salaries based on BOGUS Securitizations and fixed income rakes.
There was an interesting spike in put volume Thursday. I agree, must have been some leaks or something. timing is too coincidental http://seekingalpha.com/article/87224-whats-the-matter-with-merrill-lynch
"The largest trade of the day, an order for 14,127 August 15 puts (gulp), traded on the offer for 45 cents a contract about 12 minutes before the closing bell. " From the aforementioned link^^^^ Size trader buying the 15's????