Thursday, January 17, 2008
Merrill Lynch 4Q Numbers Out
Merrill Lynch wrote off $11.5 billion of bad debt and derivatives and reported a fourth-quarter net loss of $9.83 billion, or $12.01 a share. Revenue was negative $8.19 billion. [Analysts were expecting $702 million on the plus-side, with a range between +$7.86 billion and -$3.34 billion. D'OH!] Merrill also made $2.6 billion in credit-valuation adjustments related to hedges on CDOs. The loss from continuing operations was $12.57 a share. [The analyst range was between $1.51 and $11 a share.] The stock closed down $5.56 (10.1%) at $49.45.
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I just learned today that the colossal stupidity at Merrill Lynch is hardly a new phenomenon. On 2/14/2000 Merrill Lynch Global Fundamental Equity Research Department published a report claiming that “new economy” called for “creative” valuation models because internet had unleashed a new alignment between businesses and humanity’s innate need to create. Whatever, dudes!
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