Merrill Lynch CEO Stan O'Neal has enjoyed a spectacular rise to the top of Merrill Lynch. He makes $48 million a year! Alas, now he's sinking like a stone. Since it is Schadenfreude Friday, let's review how it all went down.
October 5: Merrill estimates it will take a loss of $4.5 billion on collateralized debt obligations, i.e., mortgage-backed securities.
Tuesday, October 23: Er, take that back. CEO announces that third-quarter losses might be more than first projected. Like $2 billion more. Whoopsie! O'Neal's "job could be in jeopardy depending on the actions he takes to reassure Merrill's board," predicts the Wall Street Journal.
Wednesday, October 24: Merrill posts an $8 billion dollar write-down in its third-quarter earnings report. It's the biggest loss in the company's history. The Guardian calls it, "Pretty spectacular." "Okay, here is the deal," writes Todd Sullivan on his Valueplays blog. "A few hundred million would have been acceptable but to almost double the estimate and be off by almost $4 billion? Heads will roll." The Journal is milder: "Some will question the job security of Mr. O’Neal and his top lieutenants." Deutsche Bank analyst Mike Mayo gets agro about it: "Your peers aren't taking write-downs for $8 billion," he says during the conference call. "We I " O'Neal says. Yeah.
Thursday, October 25: People begin speculating on who might take over O'Neal's job. Brutal! Win Smith, a critic of O'Neal's who lost out on the job to O'Neal originally, is mentioned, as are John Thain of the New York Stock Exchange and Laurence Fink, chief executive of investment house Blackrock.
Friday, October 26: The New York Times reports that O'Neal went behind the back of Merrill's board to discuss a merger with Wachovia. Um, bad idea. "A major breach of corporate protocol," the paper notes.
Today, 9:49 a.m.: CNBC reports O'Neal told "friends" he expects to be ousted by the end of the weekend. Um, nice friends, dude. Are these the same people who are friends with Brangelina, the ones who told In Touch that Angelina is mean to Brad?
Merrill's O'Neal Gone By Weekend: Sources [CNBC]