BofA's stock plunge turns up heat on Lewis

Charlotte ObserverJanuary 21, 2009 

Bank of America Corp. shares fell a punishing 29 percent on Tuesday, the biggest one-day percentage drop in the bank's share price since at least the mid-1980s, as analysts lowered future profit estimates for the bank and more worries emerged about the U.S. financial system.

The steep drop in the stock price puts more pressure on chief executive Ken Lewis, who on Friday disclosed the bank's first quarterly loss in 17 years and a new round of government assistance largely spurred by his troubled acquisition of brokerage Merrill Lynch & Co.

The bank's shares, which closed Tuesday at $5.10, have now lost nearly 85 percent of their value since the deal was announced. That has spurred increasing rancor among investors as well as employees, thousands of whom are losing their jobs as part of the Merrill acquisition.

Lewis faces a major credibility gap with investors after he disclosed the bank began learning of rising Merrill losses last month but proceeded with the merger anyway under pressure from regulators. Former bank executives speculated the board could consider replacing Lewis as a way to assuage shareholders and stabilize the stock price. While they said he has lost the support of many employees, they also noted he has persevered through past tough times, including early criticism of his FleetBoston Financial Corp. acquisition in 2004.

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