Monday, July 28, 2008


I posted the two poster children for dilution and broken revenue models, WM, WB over the weekend and said there was more to come. Well, Merrill Lynch announced after the close that they are unloading $30 billion in toxic mortgages at a huge discount and issuing $8.5 BILLION in new common stock. By contract ,they have to issue payments to the assho......, I mean shareholders that swallowed the last raise at higher prices. The stock was initially pounded in the after market but recovered a little. I remember when Wachovia did this a few months ago, the stock initially recovered and then dropped more than 50%. What a mess. If you are a long term investor 2-5 years you may have a shot, right now--they are nothing but shorts.

LLTC never caught the breakdown today but no harm done there. UYG and QID were big winners for me as I held them through the weekend and covered. UYG is a short for the new readers. I only short UYG when I am bearish on the financials. MOS posted after the close and I don't think it lit anything on fire, pretty muted action though. I watched that AGA trade today, and it's about as liquid as a CD so be careful, an OK longer hold but not day tradeable until it gets more liquid.


e.e said...

1st paragraph page #3--

$48 pricing in Dec:
NEW YORK, December 24, 2007 — Merrill Lynch (NYSE: MER) today announced it has enhanced its capital position by reaching agreements to raise up to $6.2 billion of newly issued common stock in a private placement with Temasek Holdings and Davis Selected Advisors. Merrill Lynch expects these transactions to close by mid-January 2008.

you do the math---- say $20??
$15... 130Million shares go to 325M??

upsidetrader said...

ugly no matter how you slice it

About Me

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I am a former hedge fund manager, broker and capital markets dude who now trades for his own account. I love what I do. I will try to post some stocks and an occasional chart that looks attractive for entry.I will also try to point out the idiocy of conventional wisdom and the lack of value added by the mainstream financial media. These postings should not be viewed as recommendations.