ML lg BU nich... :P Salam NewBie, Liem
Merrill Lynch Aiming to Raise More Capital?<http://www.briefing.com/GeneralContent/Investor/Active/ArticlePopup/ArticlePopup.aspx?SiteName=Investor&ArticleId=NS20071231090719HeadlineHits> Merrill Lynch Aiming to Raise More Capital? Last Update: 31-Dec-07 09:06 ET Apparently, $6.2 billion doesn't go as far as it used to. Just a week removed from receiving a $6.2 billion capital infusion from Temasek Holdings and Davis Selected Advisers, Merrill Lynch (MER 52.97) is reportedly talking to Chinese and Middle Eastern sovereign wealth funds to raise capital, according to England's Observer. The paper didn't identify its sources for the article, yet it was also noted that John Thain, Merrill's new CEO, canceled New Year leave for his top staff. Merrill Lynch hasn't commented on the allegation. A report such as this, though, will typically draw a quick refute from the affected company if it is blatantly false. Absent a denial from Merrill Lynch, then, one has reason to believe there is validity to the report. Time will certainly tell, but for now, the market is cognizant that Merrill Lynch's mortgage-related problems run deep. Just how deep is the great unknown. Goldman Sachs last week boosted its fourth quarter write-down estimate for Merrill Lynch from $6.0 billion to $11.5 billion. In turn, the firm also cut its loss estimate from $1.50 per share to $7.00 per share. The idea that Merrill Lynch is still working to raise capital after a $6.2 billion injection, the bulk of which was reported to have been made at a 9% discount to the current stock price, is going to feed expectations that its fourth quarter report in mid-January is going to be quite ugly. This expectation is apt to keep the stock under wraps into the report. Arguably, though, the uglier the report is, the better, as it will drive a belief that Merrill Lynch is close to the bottom of the mortgage-related mess. Its ability to sell respected investors on making a capital injection during these dark times speaks to that point.
