Wachovia agrees that Merrill Lynch (MER) will take a $5 billion writedown in Q2 and slashes estimates accordingly.
More strikingly, Wachovia also trashed Merrill’s propose sale of its stakes in Bloomberg and Blackrock, suggest that these positions were “one of the few remaining positive elements of the MER story.”
Merrill has taken $21 billion in writedowns so far and traded below $30 yesterday for the first time since 1998.
Wachovia cuts Merrill’s Q2 EPS estimate from $0.63 to -$2.16 and FY2008 estimate from $0.15 to -$3.11.
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