Merrill Lynch is resorting to its trademark bull logo to convince the world it is in good shape, despite taking its biggest quarterly loss ever.
The U.S.-based investment bank has taken out a full-page advertisement in the Financial Times and in the New York Times as it starts an advertising blitz to explain to investors, employees and global opinion-makers why is still bullish about its prospects after recent write-downs for $8.4 billion.
Investment bank Merrill Lynch & Co Inc is reacting to recent negative sentiment over the biggest quarterly loss in its history relating to risky U.S. subprime mortgages, which has forced out its chief executive and sent its shares diving.
According to an internal email seen by Reuters, the bank also plans to place an advertisement in other publications later in the week and on various Web sites including those of the FT, the NYT, Bloomberg, CNBC and MSNBC.
The advertisement is titled Why Merrill Lynch is still bullish on Merrill Lynch.
We hope this advertising will put you in a better position to respond to the questions that many of you have received, Merrill Lynch's head of communications and public affairs Jason Wright said in the email to all staff.
According to the FT advertising rates published on its web site, such an ad would have cost at least $149,000 for that newspaper alone.
After taking a pummeling from the market recently, and as it still searches for a new chief executive, the U.S. bank is using the space to reassure investors and employees worldwide.
Addressing the recent loss in the Financial Times page, the bank pointed to $2 billion of net earnings for the first nine months of 2007, adding our global private client, investment banking and equity markets businesses all had record revenues for the same period.
A London-based spokesman declined to comment on the matter, and a New York-based spokeswoman could not be reached.
Merrill faces challenges because of its exposure to $20.9 billion in subprime mortgages and collateralized debt obligations. Some analysts have estimated a further write-downs of up to $5 billion, on top of the $8.4 billion write-down Merrill took in the third quarter.
Its shares have fallen more than 16 percent since September, by more than 30 percent since June.
What the people at Merrill Lynch do in challenging times is precisely what we do in less challenging times: focus on identifying opportunities to create wealth and make a meaningful difference in the lives of our clients, the bank said.
Our strength as a company suggests any setbacks will be overcome.
(editing by Elizabeth Fullerton)