03/28/2008 02:45 am ET Updated May 25, 2011

Deconstructing Merrill's Conference Call

I wasn't on the Merrill call this morning, but David Gaffen was, and it seems from his live-blog - and the Merrill share price - that John Thain just gave the market a masterclass in spinning negative announcements.

Rember that Merrill lost $12 per share in a single quarter - this is for a stock trading in the mid-$50s. The number was significantly larger than official analyst expectations of less than $5 a share, and the mood was grim going into the call. But just look at how Thain played it:

* As is S.O.P. for such things, he explained that Merrill Lynch is very profitable in terms of its business lines. That's hugely important to investors, who like to be forward-looking rather than backwards-looking.
* He emphasized that Merrill has no liquidity problems.
* He said that there would be no more dilution of shareholders beyond the capital infusion announced a couple of days ago.

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