Dan Fisher notes a flurry of press releases from law firms following the decision by the board of directors of Lubrizol to accept an offer from Warren Buffett. “Never mind that the $148-a-share offer is a 41% premium to Friday’s closing price and 64% above its 1-year moving average of $90.” [Forbes]
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Every single time there is a proposed merger, there are 2-3 law firms that investigate to see if they can squeeze anything out of it. And any time there’s the slightest hint of an accountancy problem, there are 5- firms that put out press releases saying they are investigating fraudulent activity. As a market watcher and part-time, minor investor, I don’t think these people are protecting me at all, but rather see them as a nuisance interfering with ordinary routine business 9 times out of 10.
I could not agree more. I wrote the same thing here:
accidentinjurylawyerblog.com/2011/03/lubrizol_class_action_lawsuit.html
Yesterday, a Chinese company (ABAT) crashed and the same thing happened: a bunch of law firms announced their investigation. One article said “ABAT fell on news that ‘so and so’ law firm launched an investigation of them. Now that is not how it happened but it underscores the insanity. They can investigate all they want but I think they should gather some facts other than “there was a merger” before launching an “investigation” publicly.