We noted last week that the collateral damage from the fall of Lehman was going to be dark, especially when it came to The Analysts. We never knew it was going to be this bad. Ladies, we've waded into uncharted territories and her name is Dick Bové. Three weeks ago the Ladenburg analyst recommended Lehman Brothers as a buy to clients. Recent events have determined that to not have necessarily been the best advice she could have imparted. Past performance seemed to indicate that this morning, Bové, the volatile female she is, was going to throw the mother of all temper tantrums, and flip out on Bank of America, Barclays, Hank Paulson and whoever else screwed up her call, scream and cry and wonder "how the hell could you do this to me?!", throw a shoe and perhaps go so far as to cut off all her hair. She did none of that. Instead, in a bizarre turn of events, and as though painkillered into composure, Bové offered this:
It was my view three weeks ago, that the company must merge; that management would resist a takeover; and that the merger would be hostile.
It was further my belief that the company's assets were not in devastatingly bad condition. That if given time they could be worked out without a major negative impact on shareholders. Moreover, it appeared that the company had generated $3.5 billion in revenue and $0.6 billion in pretax profit excluding the write downs of questioned assets in its third fiscal quarter (ended August 31). Consequently, I moved the rating on the stock up to a Buy.
This view was clearly incorrect. After extensive negotiation with other financial companies and the effected government divisions, no buyer was found and the government chose not to intervene to assist the company. Thus, we are stepping into uncharted territory.
I don't know about you, but this is not the Bové we signed on for. Hopefully it'll pass, but I fear we've yet to reach the bottom of this (lobotomized) bitch.
Bove's Mea Culpa On Lehman [FT Alphaville]