Monday, July 07, 2008

UBS July 4 Announcement

UBS (UBS) issued a press release early July 4 letting the world know that they did not think their losses would be really bad. Rather it would just be bad and they would not have to resort to other capital fund raising actions. On Monday when US markets open the stock drop about 8% by mid day. Investors trading in Europe had the opportunity to trade on Friday.

Given that most financial institutions are now treated with suspicion you just have to look at the timing of the announcement and wonder who leveraged what. The substance of the press release would have been known the day before the announcement and could have been released at that point. Or make the announcement on the weekend when everyone is off.

There are enough issues about timing of press releases when stocks trade in different time zones. Using a stat holiday as prominent as July 4 looks incredibly suspicious.

Arbitrage anyone!