Jefferies’ stock took a slide on the opening bell, falling to $9.75 per share from an open of $10.19 per share.
UPDATE: Jefferies just hit a yearly low, with shares trading at $9.58 around 12:16 p.m., down about 6.3% today.
Charlie Gasparino at Fox Business News is reporting Jefferies CEO Richard Handler is”making rounds” to ease worries among analysts and investors, and apparently Goldman Sachs and Credit Suisse are looking to poach Jefferies customers.
In a recent interview with Bloomberg, Handler said he expected the “turmoil” surrounding the company’s stock and bonds will dissipate soon.
Shares for the mid-size investment bank were battered earlier this month on worries European sovereign debt exposure after MF Global’s bankruptcy. Their rating was also cut by Egan-Jones, with the ratings company saying they would prefer if the investment built up more capital and lower its leverage. The firm then moved to slash its PIIGS exposure by almost half and had a small recovery. It’s unclear what triggered the sudden sell-off today.
Earlier this month, analysts at Ticonderoga Securities put out a report that it’s not just European debt that should stir worries about Jefferies. The firm could face higher costs in the face of stricter regulation on small firms, and needs to become less dependent on the short-term financing model (which will also push up costs).
But the bottom line is that investors still aren’t convinced that it’s not exposed to Europe in some manner or another. For the last few days, as Europe has fallen, Jefferies has taken it on the chin.
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