When Florida's BankAtlantic Bancorp sued analyst Richard Bove for defamation a few weeks back, it scored a bit of a PR coup. Though the suit didn't seem to have any real merit, it provided BankAtlantic with an avalanche of media coverage through which it could publicly dispute its inclusion on Bove's now infamous list of possible bank failures. But the downside of the bank's communications strategy became evident earlier this week when it posted its fourth consecutive quarterly loss and announced plans to raise some $55 million in capital. The headline on one story on the news: "Bank that's suing analyst reports quarterly loss." How's that for schandenfraude?
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The piece, which appears in Financial Week, noted that BankAtlantic "struck a defensive tone in its release, in keeping with its pending lawsuit against Mr. Bove, a high-profile banking analyst at Ladenburg Thalmann." In the release, BankAtlantic CEO Alan Levan rails against "misinformation, bad information, and simply irresponsible reporting disconnected from fact." And Financial Week wasn't alone in including the suit against Bove in its reporting on BankAtlantic's loss; it was also mentioned by the bank's hometown paper, the South Florida Sun-Sentinel.
Meanwhile, the legal imbroglio around Bove and Atlantic has done little to silence other banking bears -- up to a point. Pimco bond boss Bill Gross recently predicted that falling home prices would lead to $1 trillion in write-downs by financial firms, but he didn't name names. That seems to be the key to staying out of trouble in these post-Bear Stearns Cos. times. On Wednesday, Oppenheimer & Co.'s Meredith Whitney, who, like Bove, has been feted for being a banking pessimist early on in the cycle, appeared on CNBC to discuss the future of financial stocks. Toward the end of the 10 minute-plus interview, when Maria Bartiromo asked Whitney, "Meredith, can Lehman survive this?" the analyst was less than articulate in her response. "Uhm, I ya, I think, I don't know. I don't know."
Got that, Bryan Burrough? - Yvette Kantrow
