Magazine article American Banker

Bankers Trust Plunges from 52-Week High on Talk of Trading Woes

Magazine article American Banker

Bankers Trust Plunges from 52-Week High on Talk of Trading Woes

Article excerpt

Bankers Trust New York Corp. stock has fallen sharply in the last month, after hitting a 52-week high Feb. 2.

From that high of $84.25 per share, the stocck has lost 12% in value during a nearly relentless decline sparked by rumored losses in the bank's trading and derivatives operations.

In volatile trading Friday, the stock price rose 12.5 cents a shar, $74.375, after being off as much as $2 earlier. Still, Bankers Trust trailed other bank stocks, which were generally up strongly. And Thursday, the stock fell $2.50 a share,

A Bankers Trust spokesman declined to comment Friday on the stock's decline, saying only that the company stands by its March 3 statement that its operations have been profitable this year.

Restive Analysis

The bank's reticence has irked some Wall Street analysts. "To say that the company has been guarded is to put it mildly," said Larence W. Cohn of Paine-Webber Group Inc.

The lack of information has also given short sellers a golden opportunity. They sell borrowed shares on the prospect of paying for them at lower prices later, an activity enhanced by unchallenged negative rumors.

"Neither Bankers nor [J.P.] Morgan are going to be putting out any hard news for a while," said Raphael Soifer of Brown Brothers, Harriman & Co. "That gives the shorts or anyone else a change to play with whatever theories they may have."

"The shorts don't have to be correct," Mr. Soifer noted. "They can be gone from a stock before the news and make money whether right or wrong."

'A Grand Drama'

Still other industry watchers see Bankers Trust's recent performance as theater. …

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