weiwentg

BofA's Lewis Is Still Making Deals, But Now Aiming for Distressed Assets

BoA doesn't have a lot of avenues for organic growth, so it's not surprising to me either that Ken would seek to acquire companies in this environment.

As a fellow shareholder, the question for me is, can BoA integrate Merrill while still digesting Countrywide? Can they stay well capitalized? And did they pay too much?

Merrill did purge a lot of dodgy assets last time, but they still have some mortgage and CDO exposure. BoA's capital position was a hair above well capitalized as of last quarter. Given their CFC acquisition, they really needed to rebuild their position. And now they've gone and bought a bunch of dodgy assets. Personally, I wouldn't object if they reduced or even suspended the dividend temporarily so that they won't have to raise capital while their stock is depressed.

Meanwhile, their stock is down over 10% today. I understand the MER deal is in stock. Let's hope that BoA's stock price will remain high enough that Merrill's shareholders will vote yes on the deal.