Just a minor $5.7bn writedown and a desperate attempt to raise $8.5bn in new stock. But wait, didn’t they announce earnings last week yet made no mention of this?
Why did Merrill fail to disclose this write-down to shareholders when they reported on July 17th? The stock was $30.73 then; everyone who bought since then just got totally sandbagged.
Investigating who has been shorting the stock between then and now could prove instructive.
The financials traded today as if many people knew this was coming. How much non-public information leaked in advance of this announcement?
And how much other such information is “leaking.”
Merrill close at $24.35 today, down 11%. The earliest report of the Merrill writedowns on Yahoo News is after close of market. Seems like lots of people knew. (Other financials were down, but not nearly so much.)