Can Thain clean up Merrill?
Posted
Nov 15 2007, 12:12 PM
by
Matt Koppenheffer
Well, it's official, New York Stock Exchange chief John Thain is stepping up to the plate to be the new CEO of Merrill Lynch after the recent ousting of Stan O'Neal.
Though Merrill has taken a beating lately at the hands of its big credit portfolio write-downs, there is a lot of value still there in the company. Like many of the other broad-line brokerage houses, Merrill has had success in areas like investment banking and asset management overshadowed by overwhelming failure on the fixed income side.
The debate rages on The Motley Fool's CAPS service, where Merrill's stock is currently rated one star out of a possible five. On the bear side, GS751 noted, "This company helped issue [billions worth] of [mortgage backed securities] and related products. There are a lot more writeoffs to come … I cannot stress enough how much this baby is going to fall."
On the flip side, ghostryder13 thinks Merrill's shares are a deal right now and said:
Market overreacted to write-downs; once liquidity is restored to the [fixed income] markets a more reasonable valuation of the mortgage backed securities will be feasible. [The company's] core wealth and asset management still going strong. Axing the CEO was a symbolic sacrifice to appease the media and analysts but underlying performance remains the same, and has been overall quite positive.
So do you think Merrill can be put back on track by Thain? Or is there more trouble to come for the company? Log onto CAPS and let the community know what you think.
(Full disclosure: I do not have a financial position in any of the companies mentioned.)
