Merrill Lynch Fesses Up To More Write-Downs And Capital Raising

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Are we done with the nonsense about rumor mongers pushing down the stocks of broker-dealers? The only false rumors we've heard lately have come from the c-suites of Wall Street. John Thain repeatedly denied that Merrill Lynch needed to raise capital, but now Merrill is taking an enormous $5.7 billion write-down and raising $8.5 billion by selling new stock.
"We deliberately raised more capital than we lost last year ... we believe that will allow us to not have to go back to the equity market in the foreseeable future," Thain said in Tokyo in April. Apparently three-months later was not foreseeable.
Cue the chorus of "the worst is now over" and the reassurances that this is the last round of write-offs. Raising questions about whether Merrill understands its own balance sheet is probably rumor-mongering so we won't even get started on that.
Quotes from Merrill's Thain on capital needs [Reuters]

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