The Faber Report

MOST SHARED
- Warren Buffett and Bill Gates Share Their 'Optimism' With Eager Columbia Business Students
- Cities With the Most Home Price Reductions
- Disney Profit, Sales Top Street Forecasts; Shares Jump
- Warren Buffett's $100,000 Offer and $500,000 Advice for Columbia Business School Students
- Meet The Leaders of the New Retail Revolution
- Disney CFO and Parks Chief to Swap Roles
- Despite Rhetoric, Obama Has Limited Options To Boost Jobs
- Is Euphoric Market Ignoring Warning Signs?
- Housing Recovery 'Still In Uncharted Territory': HUD Secretary
- Microsoft's Bill Gates Praises Apple's Steve Jobs For 'Saving the Company'
- Gold Is a Bad Inflation Hedge—Like Oil: Stock Picker
- Intel's Andy Bryant Offers An Explanation
- US 'Actively Working' on Weaker Dollar: Fund Manager
- Options Boil on Biotech Buyout Rumors
- Warren Buffett's $100,000 Offer and $500,000 Advice for Columbia Business School Students
- Activision Blizzard's "Modern Warfare 2" Sales Break Records
- 5-Star Manager's 5 Stocks for Changing Markets
- What's The Forecast from Retailers? Proceed With Caution
- Job Market Politics to Keep Interest Rates Low
- AIG, Symbol of Crisis, Watches Its Stock Zoom Back
- Disney Profit, Sales Top Street Forecasts; Shares Jump
- Bill Gates Praises Apple's Jobs for 'Saving the Company'
- Cities With the Most Home Price Reductions
- Cramer: The Real Reason Stocks Fell Thursday
- Is Euphoric Market Ignoring Warning Signs?
- Video Game Sales Plunge, but Have They Hit Bottom?
- Despite Rhetoric, Obama Has Few Options to Boost Jobs
RSS FEED
CNBC Anchor and Reporter
After watching this morning’s Congressional hearings on what role the Fed and Treasury played in getting Bank of America to stick with its deal to acquire Merrill Lynch, our elected representatives failed yet again to ask the question I have never had fully answered:
![]() |
AP Ken Lewis |
Why did Bank of America [BAC
Loading...
()
] agree to pay .859 of a share, roughly $50 billion worth of its stock and a big premium to Merrill’s then stock price on Sunday September 14th, when it was clear to virtually anyone who was paying attention that Merrill’s stock price was about to collapse when trading began that Monday morning?
It is a relevant question because there is still speculation that the government encouraged BofA to do a deal at a sufficiently high price to send a message of confidence to the market.
It’s also relevant because it may have been one reason why Lewis was willing, a couple of months later, to consider trying to invoke a MAC to get out of the deal or more likely, enter a negotiation to lower the price.
In answers to questions about the deal in the days following its announcement, Lewis defended the price BofA agreed to by saying the firm viewed Merrill as a world class asset that competitors might try to swoop in and buy and so BofA needed to pay a sufficient price to lock it up.
Perhaps that is all there is to explain the strangely high price Lewis paid for Merrill. But I still wish the question had been asked.
___________________________________
CNBC Slideshow:
___________________________________
___________________________________
Questions? Comments? Write to .
- Warren Buffett and Bill Gates spoke to Columbia students, and Buffett made the students a startling offer.
- They may have wrecked their companies or saved our economy. Tell us what you think.
- Big pharma embraces social media, but how much should a tightly regulated sector say on Facebook or Twitter?
- A European dating site finds lovelorn singles from one country to be consistently uglier. Which is it?
- Contributor David Pogue looks at two of the latest efforts to perfect the digital pocket camera.
- PepsiCo is ramping up its onsite health facilities for workers.













