According to widely followed analyst Dick Bove, don't be surprised to hear that CEO Jon Corzine has engineered a deal to sell his firm, MF Global, to his former employer, Goldman Sachs.
As you likely know MF Global has landed in the spotlight after Moody's, cut its credit rating on the firm to one notch above junk status, citing an increased appetite for risk-taking and exposure to European sovereign debt.
The commentary from Moody’s combined with a surprise loss reported Tuesday sent investors running for the exits with the stock tumbling more than 50% in a matter of days.
And that's triggered chatter far and wide that MF Global is in trouble, though the firm insists its financial position remains strong.
”I wouldn’t buy the stock,” Bove tells us, “I don’t think Goldman will pay a premium.”
However he does think Goldman could be interested in MF’s assets because he expects the firm will have to sell them at a steep discount.