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The Wall Street Journal reports (subscription required) that "Bank of America (NYSE: BAC) CEO Shows Confidence With Another Big Share Purchase."It's true. Ken Lewis purchased 200,000 shares of his company's battered stock on Wednesday, the day before the stock fell to it's lowest level since 1984.
Maybe Bank of America shares are undervalued and maybe they aren't. But seriously: Why would insider buying on the part of an executive who drove the company into a ditch precisely by making bad decisions about what to buy be a good indicator? If anything, I'd be inclined to sell anything that Ken Lewis is buying.
Yes, it's true: Lewis is the CEO, so maybe he knows something we don't. But guess what? That would be illegal insider trading. So we have to assume that these buys are based on the same information we're looking. Either that or he's a crook.
Lewis obviously has tremendous confidence in his ability to turn the company around, but so far his performance has been absolutely dreadful. The fact that he still has a job should give investors no confidence in the company's board of directors, and that's a good enough reason not to own shares of a company with as many dire issues as this one.
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Reader Comments (Page 1 of 1)
2-06-2009 @ 6:10PM
davis10oregon1 said...
I beg to differ. Mr. Lewis, prior to the country and that big " M " thing he and the board did. The firm was on level ground with a very positive forward thrust movement. Following an earlier course set in place by such firms as Walgreens, and Whole food market. Each of which have a proven success story.