Make no mistake about it. Ken Lewis of Bank of America fame is the latest worst CEO in America today. And his smear campaign against John Thain is just that--sour grapes all the way.
The truth is Lewis knew exactly what he was buying from Thain. Yet for some reason Lewis could not help himself when it came to Merrill Lynch. Not only did he add Merrill’s dead weight to his own leaky boat, he even managed to do it at a premium.
That makes Lewis something of a glutton for punishment—or at the very least reckless beyond belief.
Of course, it wasn’t all that long ago when Lewis was hailed as some sort of genius in the industry for buying Countrywide Financial off of that shyster Angelo Mozilo.
Needless to say, that deal hasn’t exactly been one to crow about either.
Unfortunately, for Bank of America’s shareholders Lewis’s hubris has been as painful as it comes.
So now he is just the latest “smartest guy in the room” to be left twisting in the wind.
From CNNMoney By David Ellis entitled: BofA’s Ken Lewis in the hot seat
“Bank of America CEO Ken Lewis is quickly learning just how lonely life at the top can really be.
Last week, the Charlotte-based company reported its first quarterly loss in years, hit hard by rising credit costs and sizeable writedowns.
Making matters worse, the Treasury Department needed to give the bank an additional $20 billion in government funds last week to help it complete its purchase of Merrill Lynch. That left many investors wondering whether the company overpaid for the brokerage giant.
That was followed by Thursday’s ouster of former Merrill CEO John Thain from Bank of America. Thain’s departure is the latest in a string of exits by high-ranking former Merrill employees.
And with Bank of America shares worth less than half of what they were just two weeks ago, investors are not happy with Lewis.
“I wouldn’t call his job secure,” said Ray Soifer, chairman of Soifer Consulting, who formerly covered the commercial banking industry for Brown Brothers Harriman.
For someone who was regarded as one of the top CEOs in the rough-and-tumble financial services industry as recently as December, Lewis’ star has fallen pretty far in a short period of time.
Until the fourth quarter of 2008, Bank of America remained profitable. And Lewis won praise for pulling off two massive purchases last year during a time of turmoil, the acquisition of the troubled mortgage lender Countrywide and, of course, Merrill Lynch.
Lewis’ respect within the industry ran so deep that he was even bestowed with the title of “Banker of the Year” for 2008 by the industry trade publication American Banker.
But that now seems like ages ago. The Merrill deal looks like a disaster after Bank of America revealed that the brokerage giant lost a whopping $15.31 billion in the fourth quarter.”
By the way….
Here’s a look at what has happened to Bank of America’s share price under Lewis.
It’s not for the squeamish.