A rumor hit the tape late Friday that Bank of American (BAC) would buy Countrywide (CFC). The Financial Times got the chatter started after it reported "people close to the matter" saying the two held talks about a possible alliance. The paper also stated that the talks were early and might not lead to a deal which would be valued at about $30 bln. Options activity on CFC went through the roof in the last hour of trading on Friday along with implied volatilities.
It looks like the report was a bad one. Analysts at First Boston said BAC denied the CFC rumor, according to a post on theflyonthewall.com's FlyingMachine. Pru also said it didn't believe that BAC would purchase Countrywide.
Funnier still is that the CEO of CFC filed to sell a bunch of shares, as in 23,000 of them, as early as Friday, according to an SEC filing! The Winter blog very cleverly picked up on that aspect of the story. Sure must be nice to be the FT and be able to move a stock big time and be wrong! I would imagine if my blog, not that it would, but if my blog got a firestorm of buying started on a false rumor, some type of legal agency would have a SWAT team here that would have me tasered, spread eagle, body cavity search underway along with my wife, kids and the cat with their hands/paws up high. Insane.