If you're wondering, like I am, what you should do if you own both Bank of America and Merrill Lynch stocks now that BoA is buying Merrill Lynch, here is an article that I found on seekingalpha.com that was posted on 9/16/08 which may help:

A reader sent me an email, asking me to explain to him why Merrill Lynch (MER) is trading around $19 per share when Bank of America (BAC) offered to buy MER for $29 a share. Is it the short sellers?

Well, maybe, if they're driving down BAC's share price.

The media is floating around the story that BAC offered $29 a share for MER, but this is based on BAC's closing price of $33.74 on Friday. What BAC offered was a share swap. If the deal goes through, MER shareholders will receive 0.8595 BAC shares for each of their MER shares. Therefore, for example, if you own 100 Merrill shares, if the deal goes through you'll get 85.95 Bank of America shares.

This means that MER's share price is now tied to BAC's. It's trading at a sizable discount to its implied deal value (with BAC trading at $27 and change as I was writing this post, the implied value of MER is $23 and change a share), but that's because traders aren't certain the deal will go through and there's a possibility that BAC shares will continue falling.

If you think the deal will fall apart and you own MER, consider selling your shares and buying BAC instead. Part of the reason BAC is falling is that shareholders don't like the deal. If the deal falls apart, BAC may rise. If you think the deal will go through and that BAC has bottomed, then continue holding your MER shares. In either case, you'll be getting BAC shares. The price is still up in the air.

Another way to get into BAC, which I wrote about previously, is to buy its L Series convertible preferred. They currently sport a dividend yield of around 9%.

I personally would stay away from financial stocks right now. Instead, I'll gamble with small sums on puts and calls.

Lana   Bof A   have still   to  unravel  the debacle    that   is  Countrywide.   But then    again  Ken  Lewis  seems  to think  that   he  knows   what  he's  doing.  Any  chance  that  he'll   go after  either    Wachovia  or   Wamu   next   ? 

It's  not  as  if  they're still    laden   with    cash   at  this   hour.

tophatal .................

Unfortunately, he didn't go after WaMu.  I placed a bet there and lost!  But I also placed a bet on Wells Fargo and won.  I bought Wells Fargo (WFC) when it dipped in the low twenties.  I'm up for the year even with the acquisition of Wachovia.  I might sell though and buy some other lower priced stocks.  The banks will dip again in the next six months, I will buy back in then.  Just a thought.  For now, I'm still holding onto WFC.

Lana  

I like   the   the   fact    Lewis   explained  the   reasoning   for   going  after  Merrill  Lynch  .  Much  of  it was at   government  and   Treasury   prompting.  But  I  can't  help  feel  that   though   not  overpaying   they're   about   to  find   themselves  in   one   great   big  mess.  Much   as they've   found themselves   in  when  it came  to  the  purchase  of  Countrywide. 

John  Thain  as  the    Chairman   and  CEO  of  Merrill    has  been  a   blundering    idiot     from  start to  finish.     And   now  dealing  with   the  mess'll   be  left  to   Lewis   and  his     minions. As  they   try  to  sort    out    the  good   from  teh  bad    in  terms  of assets  and   liabilities. 

tophatal...........................

B of A have proven to be very capable of incorporating new businesses into their current business, that's why I think that it will do fine with incorporating Countrywide and MER.  The line has already been drawn in the sand, when this financial crisis is over with -- and it will be over with in a year or two like all crisis of this generation -- the big boys in the financial industry will be B of A, Goldman, JPM and to a smaller degree MS and Wells Fargo.

Goldman and JPM are trying to learn a new trick by getting into the banking business where B of A already dominate.  B of A on the other hand has MER to handle the "new" business and MER doesn't have to learn anything new.

5 to 10 years my friends.  Keep buying.

They're still working  out the kinks but at the same time how can we allegedly  trust many of the banks in question  to put this money being  given to returning the market  to some form of liquidity ?  They're placing  even greater resstraints on those  who are in need of assistance.  And at  the same time some of these  financial entities aren't even  prepared to act in accordance with what the  Treasury is requiring them to do.What rules  that  they were which by all accounts  have  been minimal at best.  Reluctantcy isn't still totally  there. In many respects it's not reassuring to the public that they'll benefit at all. 

And we now have the Big Three domestic auto makers looking  for their piece of the pie.  And that uinitial figure of $25-$34 bn is liable to go up even further  before it's all said and done. They're stating  that they're prepared to change their business practices. But to my mind  it's  all too little too late  !  And who's to say that in 6 months to a year's time they're not back infront of  Congress looking for  further billions to  burn through ? If  they can do before  there's no reason  to believe that they won't  repeat the same exercise again despite  their assurances.

tophatal .....................

Lana 

I see  that  the  Merrill  Lynch  CEO John  Thain  would  still  like to  keep  his  bonus  for  the fiscal year  2008 ?  Well  considering  the  financial  mess that  he  and  others  placed  the  company  in.  I for one  think  that  it's  an  affront  to  the  company's  shareholders  and  in  particular  Bank of America  were  they to  allow  this.  I  know  that  he  walked  into  a  mess  created  by  his  predecessor  Stanley  O'Neal  but  it'd  be  a PR  nightmare  for  Bank  of  America  were  they  allow this  to happen.  

Thain  of  Merrill Lynch  In  Fight  To  Keep  Bonus ..........  Click  this  link to  view.

tophatal ................