BlackRock Denies Any CDO Issues (BLK)

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BlackRock Inc. (NYSE: BLK) is one of the more well thought of asset managers out there.  It typically doesn’t have to respond to market rumors, but there were rumors abound that BlackRock was hiding CDO losses, and the rumors even evolved into rumors of an investigation.

While BlackRock usually doesn’t comment on rumors or speculation, it did today since this had taken shares down nearly 10% from intraday highs.  Here are some of the important guts of the firms comments.  As far as rumors related to potential losses from CDO and subprime exposure, BlackRock stated:

  • "There is simply no truth to today’s reported rumors….. BlackRock has no material exposure or losses related to either subprime assets or CDO investments….. In its fourth quarter earnings release, the Company disclosed $12 million of impairment charges related to CDO seed investments, which represented a substantial portion of the remaining balance sheet exposure to CDOs….. BlackRock is not aware of any Department of Justice investigation relating to BlackRock."

Many market and stock rumors still make their way around Wall Street, and often rumors move stocks more than actual news does.  Shares have recovered sharply from intraday lows.  At $193, BlackRock is still a bit closer to its highs of the year than to its lows.  Its 52-week trading range is $139.20 to $231.99.

Jon C. Ogg
February 19, 2008