Among other reasons existing of the acquisition of Merrill Lynch, we have come about four key reasons and rationales; the first, being that Bank of America’s CEO and Chairman of the board during 2008, Kenneth Lewis, had eyes on Merrill Lynch even before the financial crisis came about, thus he and the management believed that this would be the best time to buy over ML to extend the brawn of Bank of America’s muscle in wealth management.
Secondly, ML was facing severe liquidity issues. By the next trading day of 15th September 2008, ML would be unable repay to its short term debts. Simply, this acquisition gave ML a new lease of life.
Thirdly,
Fourthly, that there was intense pressure by the New York Federal Reserve President Timothy Geithner and U.S. Treasury
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ML had been one of the five independent investment banks on Wall Street and with the acquisition of Merrill, BofA would be ‘uniquely positioned to win market share and expand our leadership position in markets around the world’ with 20,000 financial advisors and more than $2 trillion globally in client assets.
The 50 percent ownership of BlackRock Inc., itself having $1.26 trillion in assets on 30th September 2008 would also be a huge asset to BofA. Merrill, because there was not an overlap in the customer base, and more importantly for ML’s global reaches of clients. These add strength to BofA’s debt and equity underwriting, sales and trading etc., making it an opportunity for BofA to expand their horizons.
Thus, it can be said that ML would enhance current strengths of BofA and creates new strengths in debt underwriting, equities and even merger and acquisition advices. “Now Bank of America has one of the best and largest retail brokerages in the country, one of the top investment banks in the world, and a large stake in one of the best investment managers in the world” - said James Ellman from hedge fund Seacliff
What are the major reasons investors purchase mutual funds as reported to the Lawrences by the Financial Advisor?
...s are doing well and over the many years have gone up. The company has not lawsuits currently pending which is good. The company as a whole seems to be growing even when the market is down.
The second section will be a report to the board of directors that identifies a synergistic acquisition candidate for Target. This section will identify Target's proposed acquisition terms, price, financing, and potential negotiation strategies. This segment will also include price / earnings ratios, book value, current market value, and liquidation based on the supporting financial data. Also in this part will be a discussion of the general and specific risks inherent in an acquisition strategy.
The threat of online competitors is also present to every discount broker that has not switched to online trading or chooses to remain with their current business model and not offer online services. These online trading sites have unique trading capabilities that otherwise are not present at Edward Jones. They offer sound advice on stocks and other investments instantly. Each customer has to call their Edward Jones advisor in order to place a trade. This makes sense to Edward Jones because they want to help prevent the rash decisio...
Gaughan, P. A., 2002. Mergers, Acquisitions, and Corporate restructuring. 3rd ed.New York: John Wiley & Sons, Inc.
This case discusses the unique value proposition of Dimensional Fund Advisors (DFA), which used academic research to create specialized portfolios focused on Small Capitalization companies. Their investment philosophy particularly focused on research by Fama and French and Banz. They researched how small cap companies tend to outperform large cap companies over time. In addition, FDA created an additional competitive advantage by created trading efficiencies to reduce transaction cost.
Bank of America is the company I elected to discuss their unique benefits package. Bank of America is one of the world's largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 58 million consumer and small business relationships with more than 5,900 retail banking offices, more than 18,000 ATMs and award-winning online banking with nearly 30 million active users. Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients in more than 150 countries. Bank of America Corporation stock (NYSE: BAC) is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange.
Salomon Brothers traded equities and bonds. The bond market broke out in the 80s due to the fact that the Fed had announced that finally the money supply would be fixed, and America borrowed money at a faster pace in the 80s then ever before. Once the job was landed Lewis had to go through a training program that lasted a year. The class would involve lectures from multiple managing directors and speeches given by upper management. After taking the class it seemed like everyone had a place they wanted to end up.
Furthermore, he engaged the customer with an optimistic attitude and stated how the stock could affect him or her in the best way possible. Jordan could immediately hook any client into believing what he had to offer by providing the customer with the success stories others have had under his instruction.... ... middle of paper ... ... Works Cited Belfort, Jordan. The Wolf of Wall Street.
Team B's assignment this week was to select two different publicly traded companies in the same industry. The two companies will serve as the basis for subsequent team assignments. The two companies chosen for study are Wal-Mart and Target. This paper will provide an overview of each of the selected companies.
During the past year Wells Fargo, a well-recognized bank of the United States, has been trying to clean its name and the mess it got itself into, when it was brought to the public that the bank was involved in generating fraudulent checking and savings accounts for its clients without their knowledge or their authorization. “The way it worked was that employees moved funds from customers' existing accounts into newly-created ones without their knowledge or consent”
At the time, there were not adequate facilities available to meet the demand for additional funds. Bank’s reserves of money were stored around the nation at 50 locations. The reserves were not able to be shifted quickly to the areas that were experiencing increases in withdraw demand. The immobility of reserves only added another element to the financial panic (Schlesinger pp. 41). The credit situation would become tense. Since the banks coul...
This paper will serve as a discussion on the topic of investment banking. In this paper the author includes various articles and thoughts that help to understand the background and principle of investment banking. This discourse will attempt to address this issue through explaining what investment banking is, introducing major investment bankers, and how investment banking affects our globally economy. Investment Banking Defined Investopedia (2008) stated this definition about investment banking, “A specific division of banking related to the creation of capital for other companies. Investment banks underwrite new debt and equity securities for all types of corporations.
The costs associated with the online banking operation were out weighted by the benefits provide by the program. Resource had to be taking from other areas of the bank in order to start the program, which included creating the website, make it secure and promote it to customers. However, many benefits also came with the creation of this program. The first would be that it changes the patterns in customer uses of different banking channels. In active users of online banking there were drops in the use of some on the other banking channels. Another benefit is the retention that was created by online banking. This happened because once a customer entered all their information they saw it as a buried to switch bank and have to do it all over again. Therefore, customers would stay more and longer with their current bank.
Prior to 2005 Morgan Stanley had no economical advantage, now with changes implemented in a competitive industry such as this Morgan Stanley's strength of employees, global product range and leading market share for Institutional Securities, Global Wealth Management and Asset Management has the firm making strong profits.