Bank of America CEO Ken Lewis testified on Capitol Hill today that Fed officials pressured him into buying Merrill Lynch after the bank tried to back out of the deal when they learned about Merrill Lynch's huge losses back in December. An email from a Fed official also threatened to remove the whole management team at B of A if they ever needed assistance from the government in the future and they walk away from the merger.
So basically, B of A's CEO was scared of the Fed and accepted a horrible deal for Merrill Lynch. It seems to me that Ken Lewis was more worried about his job than the benefit of the shareholders. Can you really trust a company run by this type of CEO?
B of A also got upgraded by a few analysts with a price target of $16.50. One analyst even has a price target of $30. With B of A shares currently at $12.97, it might be a good time to buy, however, I just can't seem to trust their CEO.
Sorry, I think I'll walk away from this deal.
I do not have any stock position in any of the companies mentioned in this article at the time of writing of this article.
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