Multibillion Writedown for Merrill Lynch
The world's largest brokerage, Merrill Lynch & Co. Inc., announced it posted a $14.1 billion writedown and adjustments in fourth-quarter 2007, caused by bad subprime mortgage bets that forced the brokerage to sell pieces of the company to foreign investors to raise capital.
For the year, Merrill's subprime mortgage-related losses totaled nearly $23 billion. Analysts had expected Merrill's write-down to amount to $10 billion to $15 billion.
Merrill reported a fourth-quarter net loss of $9.8 billion, the largest loss in the company's history. In contrast, Merrill turned a profit of $2.3 billion in the year-ago period.
The results eclipse the $2.3 billion loss in the third quarter when Merrill recorded an $8.4 billion write-down.
Merrill Chief Executive John Thain called the results "clearly unacceptable." The brokerage is taking steps to shore up its balance sheet. In the past month, Merrill secured nearly $13 billion in capital infusions from U.S. and Asian investors.
Published on January 17, 2008
Are you a retail Agent Looking for a Quote?