Merrill Lynch (MER) To Raise More Capital? Or Sell BlackRock Stake?

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By Douglas A. McIntyre Published
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Press reports are saying that Merrill Lynch (MER) may have to raise more capital to offset huge Q4 losses. Merrill Lynch & Co. is in talks with Chinese and Middle Eastern sovereign-wealth funds to raise capital by selling another "big" stake in the company, Britain’s Observer reported. The US investment company has already taken in more than Singapore’s Temasek Holdings.

Merrill’s stock is down by almost half this year to $53. Another raise of capital could create dilution which would take the shares lower.

The company has another option, and it would be surprising if it is not on the table. Merrill owns about half of money manager Blackrock (BLK), a company with a market cap of over $14. Shares in BLK are trading at $219, near their 52-week high.

Time for Merrill to stop selling stock and unload one of its assets.

Douglas A. McIntyre

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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