Dan Freed
Updated from 1:43 p.m. EDT
Shares of Merrill Lynch(MER Quote - Cramer on MER - Stock Picks) slipped as much as 6.1% Friday, after a Reuters report citing rumors of a possible preannouncement that it would miss analyst estimates. A Merrill spokeswoman declined to comment on the rumors. Merrill shares closed down 4.6% to $35.95, while Lehman Brothers (LEH Quote - Cramer on LEH - Stock Picks) was down 1.2% to $24.02, Morgan Stanley (MS Quote - Cramer on MS - Stock Picks) was down 3.8% to $38.68 and Goldman Sachs(GS Quote - Cramer on GS - Stock Picks) was down 1.7% to $183.77. Sanford Bernstein analyst Brad Hintz on Thursday told TheStreet.com that " it would not be unexpected" to see "hedging breakdowns" at Merrill, much as occurred with Lehman. Additionally, Hintz says Merrill has limited options as far as raising new capital goes. "Remember, Thain has nailed his flag to the mast as far as saying they're not going to raise any more common stock," Hintz says. Additionally, Hintz points out that Merrill's agreements with sovereign wealth funds that have invested in it preclude it from issuing new equity without giving those funds more equity to prevent their holding being diluted. Hintz has a market perform rating on Merrill.
Sponsored by:
RSS
