July 18, 2008
Bloomberg a Buyer as Merrill Sheds Assets
Merrill Lynch Posts Fourth Straight Quarterly Loss
“Merrill’s charges from the credit crisis now exceed $46 billion … Writedowns [this quarter] included $3.5 billion to account for the plummeting value of collateralized debt obligations, or securities backed by other bonds. Another $1.3 billion of charges were taken on residential mortgages. The firm also reduced the value of bond insurance contracts by $2.9 billion, and lowered the value of leveraged loans by $348 million.
Merrill today confirmed the sale of its 20 percent stake in Bloomberg LP, the parent of Bloomberg News. Merrill said it is financing the sale to Bloomberg Inc., the parent of Bloomberg LP.”
Selling a jewel like their stake in Bloomberg shows just how desperate things are. Looking at the monthly chart (Trader Mike is going to kill me for drawing that white trend line :-) ), we can see how important the $30 level is for MER. The stock traded under $20 back during the LTCM crisis, and may do so again here if $30 can’t hold.
(Bloomberg exercised his right of first refusal and now holds a 92% stake. His business is valued at over $20 billion now.)
July 18th, 2008 at 9:18 pm
WTF kind of trendline is that?!?!? :-)
July 18th, 2008 at 11:52 pm
As you know, Bloomberg started out as a Merrill project on Staten Island to tie all the Merrill computer stuff together and “just grew and grew” to become “it”.
July 19th, 2008 at 8:33 am
Tom D: I thought it was Bloomberg’s idea and Merrill just took a chance on him by becoming his first customer … I read the modestly titled Bloomberg by Bloomberg and don’t remember anything about his business starting out “as a Merrill project.”