So -- which should we believe?
The parent? or the child? 'Tis perplexing.
On October 3, 2008 -- when Merrill Lynch called Schering-Plough an "Underperform" stock, I argued that this had the ring of veracity, or truth -- as it was, afterall, an admission against (one's parent's) interests -- in the parlance of the federal Rules of Evidence. [B of A, astute readers will recall, helped lead the $3.8 billion public equity offerings on behalf of Schering-Plough, in August-September 2007, which, in part, financed the $15 billion purchase of Organon.]
Back on October 3, 2008, Schering-Plough's stock closed at $16.37 -- with 24 million shares changing hands. Last night, Schering closed at $16.09, essentially the same price -- but a perfectly-mirror-image (opposite) conclusion -- on the fortunes of the company?! Well. That's. Interesting.
Today, the new-parent (B of A) makes a statement that clearly reflects its (either flagging direct-holdings) interests, or its "reputational interests" with clients of the firm still holding Schering-Plough securities: it rates Schering a "Buy" at $16 -- while last month, Merrill set the very-top-price target for Schering at no more than $18 -- that's scant "room to run". Me?
I smell a need to pump, and dump, some Schering stock -- and firm up a B of A balance sheet, with some cash. This would be funny, if it wasn't the case that many retirees will end up owning this "dead cat, bouncing" -- buying in now at north of $16.25.
. . . .SGP 10:16AM ET $16.24 +0.05 +0.31%. . . .