Of Good Rumors and Bad

When Dick Bove of Ladenburg Thalman got sued for issuing a report that BankAtlantic (BBX) didn’t like, I wrote my thoughts on suing analysts and suggested that there are no lawsuits when an analyst says something nice that pumps up a stock price whether it is rumor-based or turns out to be factual. 

So I got a good chuckle out of Bove yesterday with his upgrade of Lehman (LEH) and its effect on the market.  Followed by today’s story about the State-run Korea Development Bank having an interest in buying a big chunk of Lehman, we now have a 15% spike in LEH and a few hundred points on the Dow.  How perfect!  Thanks for pointing out the absurdity of both situations, Bove. 

Of course, as predicted, Lehman was unavailable for comment.  Of course, Bove’s comments yesterday were just based upon his speculation that the bank would be a takeover target.  Of course, there will be no warnings from regulators about starting rumors.  Of course, there will be no questions about whether there was a Reg FD leak to a specific analyst about a story that gets reported the following day.  Of course, there will be no lawsuits from Lehman. 

Does this good rumor deed helping to prop up a key stock in the financial sector and lifting the market make up for making negative comments?

Comments

[chinooking:]

so why the hell doesn't the sec go after these guy's ,this kind of manipulation is criminal

2008 Aug 22 02:35 PM

[venividivici:]

This market does not have a shred of credibility. It has been compared to a casino but I think that is very unfair to casinos. They are very strictly regulated in the way they relieve their patrons of their money.

2008 Aug 22 08:53 PM

[Jimmy Lathrop:]

Any financial entity who had the money and inclination to take over Lehman Brothers would be analogous to a Texas billionaire marrying a stripper. On its surface, it seems totally absurd, because even though the pole-dancer may be attractive and charming, you are buying all the baggage and bringing its destructive behavior (drug abuse, mood swings, shady characters, checkered past) into your home, when it would be cheaper and safer to rent some action from the gal in a truck stop bathroom, especially when time is not on her side. That being said, hey, Anna Nichole Smith got lucky - maybe Dick Fuld will find some foreigners to dazzle and hand over their checkbooks while his company infects their balance sheet with the financial equivalent of herpes. No one ever said being cash heavy and risk tolerant made an institution smart.

2008 Aug 22 09:51 PM

[1worldcurrency:]

Lehman Brothers is old and gray, and sick, and Koreans are probably more sensible than Texans.

2008 Aug 23 03:41 AM

[Jimmy Lathrop:]

After a good night's sleep, I woke up and reviewed my comment. I apologize. Comparing Lehman Brothers to Anna Nicole Smith is an insult to her memory.

2008 Aug 23 08:38 AM

[bill d:]

Also if you believe she "got lucky" I guess you wouldn't mind changing places with her ?

2008 Aug 23 03:07 PM