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Dick Bove Out With A "Buy" Rating On Wall Street Integrity, A Year After A Comparable Call On Lehman
When one thinks of Dick Bove, one usually recalls this little note issued 3 weeks before Lehman's bankruptcy:
“If one assumes that the Neuberger Berman subsidiary is worth
somewhere between $9 to $13 billion, the rest of the company is being
valued at less than zero. A valuation of this nature would only make
sense if the company were to go out of business and then still owe
money to its creditors, which of course could not happen. Once it is
bankrupt, it is bankrupt.”
“A deep pocket buyer would not be
under any pressure to sell any assets. It could wait until they mature.
It could sell Neuberger for more than the value of the whole company
and basically own Lehman Brothers for nothing.”
Richard X. Bove, 8/21/2008
And, of course, of this exclusive interview on CNBC in which Dick justified his upgrade of Lehman to a Buy on the same day:
In an exclusive interview on Fast Money
Bove said, “If you take a look at Neuberger Bergman (the asset
management arm of Lehman that’s likely up for sale) and you make the
assumption that at its low point it’s worth $9 billion and you subtract
that from the market cap of Lehman, it means the rest of the company is
worth less than zero. That suggests you get all the rest of Lehman for
nothing.”Dylan Ratigan questions that theory. “But all of Lehman for nothing could include a vast liability on the mortgage side?”“But
let’s assume the buyer is a bank," replies Bove. "There’s no need for
them to sell these assets on a fire sale basis. They can hold onto them
until they mature. The vast majority of the assets are cash flowing. So
if you can sell Neuberger Bergman for more than you pay for all of
Lehman you would get Lehman for nothing.”
Our condolences to whoever listened to Mr. Bove in the torrid days of last summer, where any money used for LEH stock purchases ended up worth exactly $0.00 less than a month later.
Yet Mr. Bove, unfazed that his reputation precedes him, makes what appears to be an exclusive appearance on Business Insider, where he decries not only the recent spate of inquiry into the Merrill merger, but hopes that people would just stop talking about this whole Lehman fiasco.
In a report released today, Dick Bove takes aim at everyone who’s taking aim at the bank.He says that the bank ‘s legal entanglements are “distracting management and costing shareholders money."
He addresses the SEC first. Basically, he says the SEC requested that BofA pay a fine because of those bonuses paid to Merrill employees. Now that judge is reviewing that fine, the SEC should just drop the case altogether because “simply asking the company to pay a fine would not right the wrongs being argued against this company.”
Then Bove takes on Cuomo, accusing the attorney generals of going after his own constituents.
“To my knowledge, the attorney general in Michigan does not bring charges against the automotive industry. Texas is not attacking the oil industry and Florida is not suing the tourist industry,” Bove writes.
And New York State too should drop its complaints against Wall Street. Bove writes the state government is “unique in believing that its citizens should be penalized for being successful.” Why would a strapped state government object that “a bunch of New Yorkers were paid hefty bonuses?” Is it trying to reduce its own tax base?
Finally he takes on the media. Bove says the media is going to overwhelm us with endless Lehman anniversary stories, which will all pretty much say that the government shouldn’t have let it fail. Well, can you imagine if Merrill went down as well? So the media too, should be celebrating the merger.
“There is very little question that the country, its economy, and the financial system are better off because Bank of America bought Merrill Lynch,” Bove concludes.
Immediately thereafter, a publicity desperate Mr. Bove proceeds to immediately retweet the Business Insider article, and his conviction Buy call on Wall Street and SEC integrity.

We hope Business Insider got some compensation for this piece, or at least some free glossy Rochdale research reports. Thus they (and they alone) would be aware if Dick Bove recently issued an upgrade to a Conviction Buy on Lehman's bankrupt stock, explaining its meteoric rise from $0.05 to $0.20 and yonder.
As for Bove's assumptions that all was prim and proper in Merrill lack of disclosure of its $4 billion bonus payments on the verge of its taxpayer funded acquisition, which the SEC already said was worthy of an earth-shattering $33 million penalty of taxpayer money, we believe the court (Judge Rakoff) has yet to voice on that. Additionally, one wonders what under what authority does a financial analyst (as highly respected as he may be) go and recommend how an Attorney General should do his job. One does not see Andrew Cuomo telling Mr. Bove to issue a Strong Buy rating on Bank of America... which may be a moot point seeing how the rather unpessimistic Dick Bove very likely has already done so: if any readers actually follow his output, please advise.
As for the media keeping mum on Lehman, yeah - we kinda sense there is a slight tension there, as the last thing needed is for someone to go ahead and recall Mr. Bove's horrific stock recommendation on the bankrupt firm, which may put a slight dent on Bove's otherwise pristine stock picking record.
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05-Sep-08 14:46 ET In Play Lehman Brothers ticks higher as Cramer on CNBC says LEH is a screaming buy, saying it can't get worse from here (16.21 +1.03) -Update
Thanks DICK!
Bove says financial crisis over, buy banks (Mar 2008)
http://www.marketwatch.com/story/financial-crisis-is-over-buy-banks-bove...
I love to watch those old utube videos with pundits claiming Merryl Lynch is cheap at $70 and so on and so forth. Now if only there is an honest producer who will present a bunch of them with the likes of Dick Bove claiming C or other banks are a steal at $50-$100 each. Or may be one could sponsor an infomercial to show such a program at prime time,since I am sure that no Producer will dare to present such a thing on any of the major propaganda channels. And one more thing:why is this guy still in business since he thinks banks are a steal at any and all prices?
remember the one Jon Stewart did with Peter Schiff as his guest? It was a montage of all these pundits, cnbc'ers making fun of Schiff...it was hilarious.
Yep.
For all I know, Schiff just got lucky this time...either way, those videos make me laugh.
FYI, it wasn't just CNBC...not that it matters.
...oh, and by the way, they are laughing at him again...
-Rick Blaine
Bove says financial crisis over, buy banks (March 2008)
http://www.marketwatch.com/story/financial-crisis-is-over-buy-banks-bove...
The timing is ominous. GS making a bunch of recos. Seems like "oil going to 200" all over (even now oil going up as dollar breaks down.)
Getting to be the right time and once some biggie goes negative GS, etc. will have cover to short big time. Should be once all this new stock has been settled into sucker accounts. Those poor pensioners.
dick bovine in all his blovial splendor.....
You forget when he called Citigroup the "Deal of a Century"
http://www.cnbc.com/id/27010139/
Take a look at the beauty of the internet and worthless analysts....
He meant for the Government !
I did see DB on tv a couple weeks ago and he said the he thought most of the bank stocks were overvalued. His only "buy" was a conservative bank it Conn. or something. Of course that didn't make the headlines at all.
cnbc dot com had it on as a headline for at least a couple of hours that day. It's not hard to forget something like Bove making that call.
“To my knowledge, the attorney general in Michigan does not bring charges against the automotive industry. Texas is not attacking the oil industry and Florida is not suing the tourist industry,” Bove writes.
Is this what passes for ethics these days? "It's a big industry here, so we shouldn't pursue criminal activity." That someone would proudly and openly make such a statement.... No wonder this country is collapsing.
wats ethics (lol)?!
Do people actually pay these clowns for this crap? Amazing.
And the next crash won't be something minor like LEH. Remember, all the banks are backed by the US govt now, why would their share prices decline?
Well, if their backer can't back them anymore, that would be a problem...
Bove like Citi too @ $20. As Fleck says... these people are mostly "dead fish."
He didn't like it-he was in love with it--it was the buy of a lifetime...at the time.
That's what I remember too.
this is what needs to be done to dick bove. http://www.youtube.com/watch?v=7dXylT4F0SY
http://www.youtube.com/watch?v=7dXylT4F0SY
Thanks Dick.
Now I know the time is near to short financials.
Idiot.
Not sure if this has been covered here. A bit dated but I hadn't heard, until now, that Michelle Obama has 26 servants working for her.
How many did Laura Bush have?
http://www.nationalexpositor.com/print/1678.html
The Queen needs her peasants.
OMFG.
When people like Dick are not dragged through the streets and mocked, the end is near.
Bove is like the fbi agents who block all concerns fellow agents had before 911. They were rewarded. The ones who tried to act on their concerns were demoted.
ya gotta show the fbi some love... http://www.youtube.com/watch?v=RnVwVXkp9xc
Is that another 'SELL' signal?
And oh, by the way, Neuberger ended up selling for $2.2 billion. What's a 76% error among friends? Of course, even if his valuation was right, his larger point was still dead wrong. Ratigan was more or less right on the money -- it was the debt that was killing Lehman.
Is that another 'sell' signal?
Dick Bove is a useful idiot.
Dick and Ben Stien must be the best of friends. If that limp wristed nasal talker Stien is positive about financials, I'm loading up on SKF..any news?
+1...rotflmao
I actually started a small position on SKF today, and I don't know why. It was like I was possessed, and after it was over, there it was in my portfolio positions.
Bove couldn't find his ass with both his hands let alone pick a winner.
All professionals who deal with the public have a possibility of malepractice suit. Why in this profession(pumping stocks),there is no malepractice suit?may be the reason is "oh it is only money you are losing,no big deal"