If ever I've heard an investor base singing "na, na, na, na / na, na, na, na / hey, hey, hey, goodbye" it's Merrill Lynch (NYSE:MER) investors today. The rumor mill is in full force, with widespread talk that CEO Stan O'Neal could be on the chopping block. And the stock? Well, it's up more than 5% on the chatter.

The names being tossed around as potential replacements for O'Neal include BlackRock's (NYSE:BLK) Larry Fink and NYSE Euronext's (NYSE:NYX) John Thain. Merrill bought a sizeable chunk of BlackRock after it sold its investment management business to BlackRock.

So why would Stan get the boot? Well, the most obvious reason would be the massive losses that Merrill racked up in its third quarter. The firm took writedowns of more than $8 billion during the quarter, after announcing just weeks before that the losses would be much smaller. Potentially making that sting worse for board members and investors is the fact that O'Neal has been compensated so well over the past few years for producing great-looking results on many of the activities that led to the firm's outsized losses. In 2006, O'Neal's total compensation amounted to $48 million.

Also playing into the ousting rumors were reports that O'Neal had approached Wachovia (NYSE:WB) about a merger without approaching the board first. While this would be no-no in normal times, when it comes on the tail of $8 billion-plus in writedowns, it's going to tickle people even less.

And O'Neal? Well, the US Weekly-esque coverage of the situation suggests that he sees the writing on the wall. Some reports have claimed that he thinks the axe could come down before the end of the weekend.

Would a management shake-up at Merrill help the situation? There are no guarantees, but the current regime has not set a terribly high bar for success.

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Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned. You can also visit Matt on MSN's Top Stocks blog. The Fool's disclosure policy would consider taking the top spot at Merrill.