Merrill Lynch & Co Inc. is a holding company that provides investment, financing, insurance and related services to individuals and institutions on a global basis through its broker, dealer, banking, insurance and other financial services subsidiaries. On September 29, 2006, Merrill Lynch completed the merger of its Merrill Lynch Investment Managers (MLIM) business with BlackRock, Inc. (BlackRock) (the BlackRock merger). The Company owns a 45% voting interest and approximately half of the economic interest of BlackRock.
John Thain has stated that his office redecoration was a mistake and he has said he will reimburse the company the US$ 1.2 million.He also said that the losses if the final quarter were all from legacy positions and that B of A had known about them at the time they bought Merrills. The losses arose towards the end of the quarter and B of A were informed as soon as they arose. He also stated that B of A management was consulted on the bringing forward of bonus payments.After taking on the role as head of Merrill Lynch, John...
Without commenting on the departure of John Thain, Bank of America issued the following press release on his replacement. It is believed that Thain was forced to resign following the announcement of the US$ 15 billion in losses in the 4th Qtr and after publication that Thain had brought forward to December of last year the payment of bonuses for his division. It is believed that bonuses in excess of US$ 4 billion were paid prior to year end. The New York attorney general has begun an investigation into the bonus payments.CHARLOTTE, N.C., Jan. 22 /PRNewswire/ -- Bank of America...
After being acquired by Bank of America at the beginning of the fourth quarter of 2008, Merrill Lynch produced an after tax loss of US$ 15.450 bn. The Merrill Lynch losses brought Bank of America to a quarterly loss of US$ 1.8 billion
NEW YORK, December 5, 2008 – Merrill Lynch & Co., Inc. (NYSE: MER) announced that Bank of America’s acquisition of Merrill Lynch was approved today at its special stockholders meeting along with two other related proposals. Under the terms of the transaction, which was announced on September 15, 2008, Merrill Lynch stockholders will receive 0.8595 of a share of Bank of America common stock for each share of Merrill Lynch common stock held immediately prior to the merger and Merrill Lynch & Co., Inc. will become a wholly-owned subsidiary of Bank of America Corporation. The acquisition is expected to close...
NEW YORK, October 16 – Merrill Lynch (NYSE: MER) today reported a net loss from continuing operations for the third quarter of 2008 of $5.1 billion, or $5.56 per dilutedshare, compared with a net loss from continuing operations of $2.4 billion, or $2.99 perdiluted share, for the third quarter of 2007. Merrill Lynch’s net loss for the third quarterof 2008 was $5.2 billion, or $5.58 per diluted share, compared with a net loss of $2.2billion, or $2.82 per diluted share, for the year-ago quarter.Third quarter 2008 net revenues were $16 million, driven by a number of significantitems, including:• Net write-downs...
Current Merrill Lynch share price link click here.
Recent Events -Merrill Lynch
Full Year Loss and Recapitalisation
On 17 January 2008, Merrill Lynch reported a net loss from continuing operations of US$ 8.6 billion for the full year 2007.The results were dramatically impacted by net write-downs in the 2nd half of 2007 of US$ 19.4 billion relating to U.S. ABS CDOs and US sub-prime residential mortgages.In addition to the write-downs, credit valuation adjustments of US$ 2.6 billion relating to hedges with financial guarantors on U.S. ABS CDOs were recorded in the final quarter.
Significant Failures
The recently appointed Chairman and Chief Executive, John Thain, has been explaining to analysts and investors that the profit hit was caused by a number of significant failures including poor risk management on the trading desks, the increased siloing of the business over the last few years with not enough control from the top, lack of collaboration across the firm, insufficient management of the balance sheet and an inappropriate incentive scheme.He has announced significant initiatives to address these issues including new senior hires, a weekly across the firm risk management meeting, a more focused allocation of risk and an incentive plan firmly based on overall company performance and a greater proportion of incentives to be paid to employees in the form of stock.
Capital Raising
The company has raised additional capital through a US$ 6.6 billion mandatory convertible preferred stock issue in the form of a private placement mainly to the Korean Investment Corporation, the Kuwait Investment Authority and Mizuho Corporate Bank, This was in addition to the US$ 6.2 billion private placement of newly issued common stock to Temasek Holdings and Davis Selected Advisors.
Executive Compensation
Shareholders are obviously upset that the stock price has fallen by around 40% over the last year.In addition, many have expressed concern that the previous Chairman and Chief Executive, who presided over many of the above listed failures, has been allowed by the Board to resign with an estimated final compensation package of US$ 160 million.
Please complete our Survey. It consists of 2 background questions and 10 “issue” questions. It should take less than two minutes to complete. However, it will give great insight into investors’ views. Thank you.
