Six months ago, Ken Lewis, chairman and CEO of Bank of America, was heralded as a Wall Street savior, snapping up a tottering Merrill Lynch in a high-stakes deal and ensuring the future of his company while some of the country's most storied financial institutions fell apart around him.
In September, Bank of America acquired Merrill for $29 a share, or about $44 billion, and a seemingly ascendant Lewis bragged to reporters: "We are good at this."
What a difference a few months makes. Despite a good day Thursday, Bank of America shares have fallen 84 percent since Oct. 1. The Merrill deal has been scrutinized by Congress and the New York attorney general, and -- adding insult to injury -- the bank, like some of its top competitors, risks a takeover by the federal government.
In the face of dramatic losses to the company's stock price, Lewis, 61, remains bullishly optimistic. But many shareholders and observers are far less certain that the bank can weather the storm of the financial crisis.
Laying the blame squarely on Lewis, who succeeded the larger-than-life Hugh McColl in 2002, some doubt the current CEO will be able to keep his job if the company continues to hemorrhage money, while other investors are calling for his resignation outright.
"It is going to be very difficult to watch the stock price go from $40 to $5 and be able to survive that," said Paul Miller, a banking analyst at Friedman, Billings, Ramsey & Co. "This is his baby. He did the acquisitions of Merrill, Countrywide and LaSalle Bank. How anyone can make the decisions he made and survive is baffling."
Beginning last summer, as pillars of the economy fell, from Countrywide -- then the nation's largest mortgage lender -- to Merrill -- a stalwart of the financial services industry -- Lewis bought them up, putting a damper on the bank's balance sheet.
Some shareholders believe the government's funding gives the bank enough revenue to protect it from exposure to risky mortgage assets from Countrywide and Merrill. The bank, they say, is also insulated by a steady stream of capital from depositors. Furthermore, they argue, had Lewis not acquired Countrywide and Merrill Lynch, the impact to the overall economy would be devastating.
For those supporters, Lewis' bullish optimism expressed in the Op-Ed pages of the Wall Street Journal and in the halls of Congress buoys their confidence in the market, the bank, and the man.
Offering a comment only once ABCNews.com had published this story, bank spokesman Scott Silvestri said, " We made $4 billion last year. We've had a profit in every quarter for 17 years except for the fourth quarter of 2008."
Not everyone agrees with that sentiment. Just because the bank is liquid does not mean Lewis is running the company properly, said James Ellman, a former Merrill Lynch money manager and current president of Seacliff Capital, a San Francisco-based investment firm.
"Every bank in the country can operate and open for business even if the share is a penny instead of $10 dollars, because they're backed by the FDIC and full faith and credit of the government," he said. "But shareholders should be upset. Lewis entered several deals -- LaSalle, Countrywide, Merrill -- despite being on record saying no one should invest during the second half of 2008."