Black Steps Down, BlackRock Stake Sold

Published: Nov 03, 2010

 Finance       

It's shaping up to be a Black Wednesday.

Steven Black, a vice chairman of JPMorgan Chase and the former co-CEO of the firm's investment bank, said he is stepping down, ending a long run alongside his colleague Jamie Dimon, the current CEO of JPMorgan who worked with Black at Citigroup in the 1990s. Black hasn't indicated what's next for him but conjectured it might have something to do with (surprise surprise) a hedge fund or private equity firm.

Meanwhile, Bank of America announced that it will sell most of its not insignificant stake in the world's largest money manager, BlackRock. BofA inherited the stake when it acquired Mother Merrill Lynch (which had hatched a deal with BlackRock back in 2006). The move underscores how BofA under Brian Moynihan has been largely steering in a different direction than it did under Kenny "They Killled Him" Lewis, with B. Money opting to divest rather than acquire, focusing on core businesses like consumer banking as opposed to trying to be all things to all folks.

And there's also this, from DealBook: "as part of the new regulations under the proposed Basel III framework governing financial institutions around the world, banks face stricter limits on counting minority investments toward their capital requirements, encouraging them to sell stakes like the one Bank of America has in BlackRock."

Investors seemed to like BofA's sale: the bank's stock rose on the news, albeit by just a few cents.

As for the affects to BlackRock, its shares fell 4.35 percent to $165.51 "on investor concern that the flood of new shares in the market would depress the stock. However, in the long term, the sale could actually help the company gain new holders by making it more liquid and easier to trade for institutional investors."

That is, not to worry, BlackRock will still be killing it.

***

Related Content


Content Type

25 Best Investment Banks to Work for in 2022

Today, we're excited to release our 2022 Banking 25, a ranking of the best investment banking firms to work for in North America. The ranking is based on a survey of more than 3,600 banking professionals.

Content Type

Why Fintech Is Growing So Fast and How to Break Into This White-Hot Industry

Brian Hamilton is the founder and CEO of One, a fintech startup that provides digital banking services to the shrinking U.S. middle class.

Content Type

50 Best Accounting Firms for 2022

Today, we release our annual Accounting 50, a ranking of the best accounting firms to work for. The ranking is based on a survey of approximately 11,400 accounting professionals, who were asked to rate their firms in several workplace categories, including business outlook, compensation, culture, hours, training, overall satisfaction, and work/life balance.