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Is Merrill a buy today?
Old 09-15-2008, 12:22 PM   #1
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Is Merrill a buy today?

Merrill is not up much now and BOA is being hit hard.

any buyers?
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Old 09-15-2008, 12:57 PM   #2
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No..........
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Old 09-15-2008, 01:06 PM   #3
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Yeah, you dont need a magic 8 ball for this one. Unless it always comes up "ask again later..."
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Old 09-15-2008, 01:12 PM   #4
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Yeah, you dont need a magic 8 ball for this one. Unless it always comes up "ask again later..."
How about shorting Merrill and buying gobs of Lehman?? That's what the CNBC folks will be along to advise shortly.........

Question: Who has ruined more investors?:

a)CNBC

b)Rogue brokers

c)the Federal Reserve

d)all of the above
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Old 09-15-2008, 01:15 PM   #5
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I'll take "a" for $600, Alex?

Of course , c) is going to do a pretty good job on lots of people who werent even investors.
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Old 09-15-2008, 01:41 PM   #6
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Question: Who has ruined more investors?:
Considering that BofA is doing this deal as an all-stock swap, I think that this nothing-down transaction bears a frightening resemblance to the AOL-TimeWarner "merger".

I remember the great customer-relations jobl BofA did at consolidating all the regional banks that they sucked up in the 1990s. Does anyone think they can do it simultaneously with a subprime mortgage lender and an investment bank?

Ah, but what's that hopeful refrain again? "Golly, just look at their YIELD!!"
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Old 09-15-2008, 01:47 PM   #7
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how did BofA handle US Trust or Northern Trust? forgot the exact name.

last i heard was a lot of the big rich clients wanted to leave because BoA wanted to start passing on the ATM fees to them
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Old 09-15-2008, 01:59 PM   #8
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If you want to own BAC, buying MER may be a better way to do it (assuming the deal closes, which it most likely will). As I understand it, each MER share will convert into 0.86 sh of BAC. Current prices are:

BAC 27.40

0.86 x 27.40 = 23.56

MER 19.20

So, at current prices, you save 4.36 (less any dividend differentials) by buying MER instead of buying BAC
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Old 09-15-2008, 02:06 PM   #9
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Unless of course the merger gets hosed and doesnt happen...

I believe thats called the 'risk premium'.
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Old 09-15-2008, 02:16 PM   #10
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Unless of course the merger gets hosed and doesnt happen...

I believe thats called the 'risk premium'.
That's why I said "assuming the deal closes".

But who do you think is going to "hose it"? The Feds?
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Old 09-15-2008, 02:21 PM   #11
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That's why I said "assuming the deal closes".

But who do you think is going to "hose it"? The Feds?
It will close....then just wait for the inevitable "dilution of earnings" that creeps in. Look at the bath Daimler took selling Chrysler, or others of note........
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Old 09-15-2008, 02:27 PM   #12
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It will close....then just wait for the inevitable "dilution of earnings" that creeps in. Look at the bath Daimler took selling Chrysler, or others of note........
Then, what you are saying is you don't want to own BAC. Note that I also said "If you want to own BAC". For you, the trade would be:

Buy MER and short BAC. This is what risk-arbs do.
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Old 09-15-2008, 02:49 PM   #13
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Then, what you are saying is you don't want to own BAC. Note that I also said "If you want to own BAC". For you, the trade would be:

Buy MER and short BAC. This is what risk-arbs do.
The hedge funds will be all over it...........
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Old 09-15-2008, 02:56 PM   #14
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How about shorting Merrill and buying gobs of Lehman?? That's what the CNBC folks will be along to advise shortly.........

Question: Who has ruined more investors?:

a)CNBC

b)Rogue brokers

c)the Federal Reserve

d)all of the above
.


C) It is their job to maintain order and they have failed. the other 2 are doing what they are paid to do only the Fed is failing
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Old 09-15-2008, 02:56 PM   #15
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The hedge funds will be all over it...........
I'm sure they already are.
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Old 09-15-2008, 03:15 PM   #16
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That's why I said "assuming the deal closes".
Well if we're going to actually READ posts before we respond to them, its going to get a lot less interesting.

You didnt edit your post later? I dont remember seeing that.

A lot of things can happen to hose the merger. Somewhere along the line of due diligence someone comes up with a bunch of stuff that is way worse than it was painted to be is a likely suspect.

I also dont think I'd want to own any BOA for a while after this. A lot of the value in Merrill is in the human capital...the employees, customers, relationships with the customers, etc. 95% of the time this 'capital' is not well managed and well integrated in a merger.

I think if I were in a strong mood to be a BOA owner over the long haul, that I'd wait a year or so and buy it even cheaper.
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Old 09-15-2008, 05:51 PM   #17
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Well if we're going to actually READ posts before we respond to them, its going to get a lot less interesting.

You didnt edit your post later? I dont remember seeing that.
No Bunny, I didn't edit my post after you posted. But I can certainly understand that the most prolific poster on this forum can be forgiven for skimming the posts of others and occasionally missing a phrase.
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Old 09-15-2008, 06:07 PM   #18
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I am glad I got rid of 1/2 of my BOA at prices slightly above the current price.

Unfortunately, I am short BAC $25 puts. Only 4 more trading before they expire, I really don't want this company if they are going to take bet the company size risks every few months.
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