Thain appeared late Monday on CNBC and said the firm is "well capitalized" and will be profitable soon. Maria Bartiromo questioned the credibility of those statements. Still, Thain insisted that Merrill will not need to raise any more money, for now, at least (with a little wiggle room after Bartiromo asked him to answer, wisely). He didn't rule out further write-downs if the value of risky assets continues to decline and then defended his recent moves to capitalize Merrill.
Merrill had almost $19 billion in net losses during the past four quarters. To recover, the bank raised $9.8 billion in a share sale last week and sold $30 billion in collateralized debt obligations. Merrill Lynch's total credit-related charges are nearly $46 billion since last year, according to an AP report.
Previously, Thain pledged to investors that he would avoid diluting the company's stock by issuing more shares.
Portfolio and Reuters have neatly outlined Thain's quotes:
In January:
- "We're very confident that we have the capital base now that we need to go forward in 2008."
In March:
- "Today I can say that we will not need additional funds. These problems are behind us. We will not return to the market."
- "We have more capital than we need, so we can say to the market that we don't need more injections. We can confirm that we have tackled the problem."
Meanwhile, what professional journalists are saying about Thain is staid in comparison to financial bloggers. One of the more creative blog posts comes from Here Is the City, which asks us to picture John Thain in a Gloria Gaynor costume belting "The 'We Will Survive' - The John Thain Asset Writedown Song."
It's hard to find a member of the business media that isn't critical of Thain. The Wall Street Journal's Dennis Berman seems to be the only one sympathetic to Thain's position. Of course, that could always change if Merrill raises more capital, again. - Maria Woehr
See Dealscape: Amid write-downs, Merrill plans share sale
See Dealscape: If this is capitulation, why does Merrill Lynch go first?
Has Merrill Lynch & Co.'s CEO John Thain lost all credibility? There seems to be a lot of contradictions between his statements and actions as of late, and the media is making a mockery of him for it.
