BofA: This is not good
In the past two days, Bank of America has lost $20 billion in market cap, and the Merrill merger is looking tenuous at best. WSJ's Deal Journal breaks down what is happening, with this money quote:
"In short, it has been an object lesson in ‘How Not To Communicate With Shareholders.’
What makes it all the more puzzling is that there are precedents for the markets severely punishing banks that did not give enough reliable or timely information about their financial situation: think Bear Stearns and Lehman. And we know how those turned out."
UPDATE: Ken Lewis has shown John Thain, the ex-CEO of Merrill, the door. Now this is the Bank of America we all know and love. Apparently Lewis got tired of trying to make it work with Thain and just got rid of him. Also, CNN reports today that Thain spent $1.22 million upfitting his office when he started in late 2007, at a time when Merrill was already struggling. That kind of thing was never going to fly in BofA's culture.