Yesterday, automotive parts supplier Lear (NYSE: LEA) announced that it is preparing to file for Chapter 11 bankruptcy protection. The company has also lined up financing to fund operations while it is under court protection.

LEA's subsidiaries outside of the United States and Canada will not be a part of the bankruptcy filing. According to the company, its "operations outside the United States and Canada are well-capitalized, well-positioned and have a strong backlog of new business."

With its stock price in the toilet, Lear (NYSE: LEA) Chairman and CEO Robert Rossiter bought about $400,000 worth of stock.

That, and the fact that The Wall Street Journal picked up (subscription required) the story was enough to drive the stock up nearly 25% today on no other news. But here's a newsflash: the PR value of the purchase far exceeds the actual value of the investment -- $400,000 worth of insider buying drove the company's market cap up more than $20 million. Other insiders have since followed suit and purchased token amounts of stock: the CFO and the president of global seating systems,

Making me even more skeptical of the situation, Rossiter told the Journal that "The stock is so undervalued, it's unbelievable."

Rossiter is milking this transaction for all the positive publicity he can get -- something that Lear has been sorely lacking for a long time.

Orchestrated insider buying accompanied by media interviews makes me skeptical, and investors are better off focusing on the real story: even after these high profile buys, Mr. Rossiter still owns well under 1% of the company's stock. That's hardly a vote of confidence.

Billionaire activist investor Carl Icahn has dumped 8.5 million shares -- two thirds of his total stake -- in struggling auto supplier Lear (NYSE: LEA). Icahn Partners' senior managing director Vincent Intrieri resigned from the board, and explained that the sale was done to allow the firm to realize a tax loss. He also claims to be confident in the company's ability to remain viable in spite of the troubles facing the industry.

Yeah, okay. Icahn and Intrieri are probably just saying that to avoid leaving the company with a slap to the face (or a kick in the groin, as the case may be), given that the company's precarious capital position makes it extremely dependent on market confidence.

Here's why I don't buy it: Icahn still has a significant stake in the company -- a little less than 5% compared to 16% prior to the sale -- so, if he really believed in the company's prospects, why would he give up the board seat?

Icahn's taking a huge hit on Lear, but he should thank the company's other shareholders for preventing something that could have been a lot worse. Last year they rejected his offer to take the company private for $2.9 billion. The market cap now sits below $160 million.

MOST NOTEWORTHY: The auto and auto parts sector, Marvell Technology and FMC Technologies were today's noteworthy initiations:

• Citigroup initiated the auto and auto parts sector, and believes strong international growth provides selective opportunities. They upgraded General Motors Corporation (NYSE: GM) to Buy from Sell and Lear Corporation (NYSE: LEA) to Buy from Hold.
  
• Marvell Technology Group (NASDAQ: MRVL) was initiated with a Neutral rating by Bank of America, which believes the company's earnings power will be limited in FY09.
  
• FMC Technologies (NYSE: FTI) was assumed with an Overweight by JP Morgan, which believes that subsea development offers one of the best opportunities in the energy sector.

OTHER INITIATIONS:

• Marriott International Inc (NYSE: MAR) was initiated with a Buy rating by Stifel.
  
• Broadcom Corporation (NASDAQ: BRCM) was initiated with a Buy rating by Bank of America.
  
• Ruth's Chris Steak House Inc (NASDAQ: RUTH) was initiated with an Outperform rating at Raymond James.
  
• JMP Securities resumed coverage of Palm Inc (NASDAQ: PALM) with an Underweight rating.

MOST NOTEWORTHY: Expedia (EXPE), YRC Worldwide (YRCW), Fiserv (FISV), and select radio stocks were today's noteworthy upgrades:

• JP Morgan upgraded Expedia (NASDAQ: EXPE) to Overweight from Neutral on expectations for U.S. bookings growth and margin stabilization.

• YRC Worldwide (NASDAQ: YRCW) was raised to Neutral from Underperform based on valuation.

• Fiserv (NASDAQ: FISV) was upgraded to Sector Outperformer from Sector Performer at CIBC following the CheckFree (CKFR) acquisition.

• Banc of America upgraded Citadel Broadcasting (NYSE: CDL), Cox Radio (NYSE: CXR) and Entercom Comm (NYSE: ETM) to Neutral from Sell as they believe it is time to cover short positions with the expected Q3 weakness likely priced into shares. They caution that this upgrade is not a buy signal as downside risk remains...

OTHER UPGRADES:

• Wachovia upgraded Cabela's (NYSE: CAB) and KBR Inc (NYSE: KBR) to Outperform from Market Perform.

• Baird raised Lear (NYSE: LEA) To Outperform from Neutral.

• Nokia (NYSE: NOK) was upgraded to Outperform from Neutral at Credit Suisse.

• Pacific Crest upgraded shares of eBay (NASDAQ: EBAY) to Outperform from Sector Perform.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: Wilshire Bancorp (WIBC), American Express (AXP), AMR Corp (AMR), Delta Air Lines (DAL) and UAL Corp (UAUA) were some of today's noteworthy upgrades:

• Friedman Billings upgraded shares of Wilshire Bancorp (NASDAQ: WIBC) to Market Perform from Underperform based on valuation.

• Goldman Sachs upgraded shares of American Express (NYSE: AXP) to Buy from Neutral as they believe American's network business is undervalued.

• UBS upgraded AMR Corp (NYSE: AMR), Delta Air Lines (NYSE: DAL) and UAL Corp (NASDAQ: UAUA) to Neutral from Reduce saying the capacity cuts bode well for industry pricing...

OTHER UPGRADES:

• Wachovia raised Orbital Sciences (NYSE: ORB) to Outperform from Market Perform.

• Cognos Inc (NASDAQ: COGN) was raised to Strong Buy from Outperform at JMP Securities.

• Deutsche Bank upgraded PetroChina Co Ltd (NYSE: PTR) to Buy from Hold.

• JP Morgan upgraded Lear Corp (NYSE: LEA) to Overweight from Neutral.

• Matrix USA raised Marriot International (NYSE: MAR) to Buy from Hold.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MAJOR PAPERS:

• The Wall Street Journal (subscription required) reported that John Mackey, the CEO of Whole Foods Market Inc (NASDAQ: WFMI), used a pseudonym to blog about his company on Yahoo message boards for eight years, including panning rival Wild Oats Markets Inc (NASDAQ: OATS), which Whole Foods is trying to buy.
• Carl Icahn's American Real Estate Partners new offer of $37.25 a share for Lear Corp. (NYSE: LEA), supported by the Lear board, has been rejected by proxy advisory firm Institutional Shareholder Service, reported the Wall Street Journal.
• Barron's Online's (subscription required) "Inside Scoop" column reported that two institutional investors, Buckingham Capital Investment and Morgan Stanley, have sold about 3.2M shares of Build-A-Bear Workshop Inc (NYSE: BBW), as they feel the company won't get much more of a premium as a takeover target, if private equity is still even interested at all.
• JP Morgan Chase and Company (NYSE: JPM) and Goldman Sachs Group Inc (NYSE: GS) have obtained key roles advising Apollo Management on its expected IPO, reported the Financial Times (subscription required).

OTHER PAPERS:

• According to representatives from Congress, exclusivity deals like Apple Inc's (NASDAQ: AAPL) multi-year iPhone contract with phone provider AT&T Inc (NYSE: T) trap customers, forcing the users to stay with the providers as long as they want to continue using certain devices, reported AppleInsider.com.

The Volatility Index for S&P 500 Options is down $.32 to $15.65.

Lear Corp. (NYSE: LEA) June 40 calls bid up on expected Buyout offer exceeding Icahn's $36. LEA, an automotive interior systems & components supplier, announced on February 9, 2007 that American Real Estate Partners, a holding company controlled by Icahn, will purchase LEA for $36 per share in cash. LEA June 40 calls are bid $.85, according to Track Data, suggesting buyers expect LEA to trade above $40 in the next three months.

Accredited Home Lenders (NASDAQ: LEND) volatility increases to 133 suggesting Aggressive Risk. LEND, a mortgage company originating, financing, securitizing, servicing and selling non-prime mortgages, is recently down $1.00 to $16.57. On March 2, LEND filed to delay its 10-K. LEND call option volume of 7,784 contracts compares to put volume of 16,687 contracts. LEND April option implied volatility of 133 is above its 26-week average of 60 according to Track Data, suggesting larger price fluctuations.

Option volume leaders today were: Google (NASDAQ: GOOG), Citigroup (NYSE: C), Altria (NYSE: MO) and ScanDisk (NASDAQ: SNDK).

The Daily Option Update is provided by Stock Options Specialist Paul Foster of theflyonthewall.com.

MOST NOTEWORTHY: Lear Corp (LEA) and Tellabs Inc (TLAB) were today's most notable upgrades:

• Lear Corp (NYSE: LEA) was upgraded to Neutral from Underperform at Credit Suisse following the $2.31B cash bid from Carl Icahn.

• Merrill Lynch upgraded Tellabs Inc (NASDAQ: TLAB) to Buy from Neutral, citing expectations for an improvement in cross-connect demand and margins; the firm expects Tellabs to benefit from AT&T's (NYSE: T) new broadband initiatives, a demand recovery at Cingular, T-Mobile 3G deployment plans and an increase in Sprint/Nextel (NYSE: S) base stations.

OTHER UPGRADES:

• JP Morgan upgraded Nvidia Corp (NASDAQ: NVDA) to Overweight from Neutral based on expectations for gross margin upside to be driven by improved unit costs and market share gains in the notebook segment.

• Raymond James upgraded shares of AirTran Holdings Inc (NYSE: AAI) to Outperform from Market Perform with a $14 target.

• CIBC upgraded Kronos Inc (NASDAQ: KRON) to Sector Outperformer from Sector Perform, with a $46 target, as they find valuation attractive at current levels given their increasing confidence operations are improving.

• State Street Corp (NYSE: STT) was upgraded to Equal Weight from Underweight at Morgan Stanley following the news of the Investors Financial Services Corp (NASDAQ: IFIN) acquisition.

• Triad Hospitals Inc (NYSE: TRI) was upgraded to Neutral from Sell at Bank of America.

• Overstock.com Inc (NASDAQ: OSTK) was upgraded to Neural from Sell at First Albany, as the worst is already reflected in the stock's valuation.

• Matrix USA upgraded Estee Lauder Co Inc (NYSE: EL) to Hold from Sell based on fundamental trends.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).