In a CNBC EXCLUSIVE, Charlie Gasparino reports that Merrill Lynch CEO Stan O'Neal has privately conceded to friends and that he will probably be out of a job by the end of the weekend. Gasparino reported the story during CNBC's "Squawk on the Street."
Please see unofficial transcript below. All references must be sourced to CNBC.
DATE: October 26, 2007
PROGRAM: "Squawk on the Street"
TIME: 9:10 am ET
MELISSA: THANK YOU VERY MUCH, RICK SANTELLI. SHARES OF MERRILL LYNCH ARE RISING, THIS AFTER THE BLOODBATH OF POSTING A WRITEDOWN EARLIER THIS WEEK. THERE IS A REPORT THIS MORNING THAT CEO STAN O'NEAL APPROACHED WACHOVIA ABOUT A MERGER BUT WITHOUT THE BOARD'S APPROVAL. CHARLIE GASPARINO HAS THE VERY LATEST.
GASPARINO: WELL, SOURCES ARE TELLING CNBC THAT O'NEAL IS CONCEDING HE'S PROBABLY OUT BY THE END OF THE WEEKEND. I'VE BEEN TALKING TO A LOT OF PEOPLE OVER THE LAST COUPLE OF DAYS. THE REAL REASON FOR ALL THIS, LET'S FACE IT, HUGE WRITEDOWNS, HUGE LOSSES, AND THE FACT THAT HIS STRATEGY OF INCREASING KRISSING RISK ON THE BOND DESK HAS PROVED TO BE A FAVOR. STAN O NEAL HAS PRIVATELY CONCEDED TO FRIENDS THAT HE'S PROBABLY GOING TO BE OUT OF A JOB BY THE END OF THE WEEKEND. I'VE BEEN PUTTING IN LOTS OF CALLS TO MERRILL LYNCH. THE FINAL STRAW WAS THAT REPORT IN "THE NEW YORK TIMES" ABOUT HIM APPROACHING WACHOVIA. IT'S NOT A BIG DEAL FOR A CEO TO APPROACH ANOTHER CEO ABOUT DOING A DEAL, I THINK THE PROBLEM IS THAT IT'S THE FINAL STRAW. SOCIAL SECURITY ESSENTIALLY THAT HE'S BASICALLY THROWING IN A TOWEL. MAKE NO MISTAKE, STAN O'NEILL IS NOT BEING OUSTED, WE'RE HEARING HE'S TELLING PEOPLE HE'S PROBABLY GOING TO BE GONE, NOTOUTED JUST BECAUSE HE TALKED TO A CEO, HE'S OUSTED BECAUSE HE PICKED THE WORST PART OF THE MARKET ESSENTIALLY TO BET ON, AND HE LOST. HE DIDN'T GROW THE FIRM EXCEPT FOR PUTTING IN EXTRA RISK ON THE BOND DESK, AND THAT'S WHAT'S DOOMED HIM. IF HE'S PRIVATELY CONCEDING, YOU'VE GOT TO THINK HE'S OUT. AND THEN WE HAVE TO TALK ABOUT REPLACEMENTS, I THINK IT'S LARRY FINK'S JOB IF HE WANTS IT. I AM NOT SURE IF LARRY WANTS IT. INTERNALLY, GREG FLEMING, HE'S GOT A LITTLE BIT OF PROBLEMS BECAUSE HE WAS ONE OF THE GUYS WHO HELPED STAN APPROACH WACHOVIA. THERE'S BOB McKHAN, HE'S ANOTHER POSSIBILITY. I THINK IT'S LARRY FINK'S JOB IF HE WANTS IT.
MELISSA: ALL RIGHT, CHARLIE, THANKS SO MUCH.
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