When asked about Jefferies's Monday letter, Sean Egan said in a phone interview with TheStreet that the ratings firm didn't have a response. Of Egan Jones ratings, he said "we are known for our timely, accurate ratings." According to an email obtained by Bloomberg, Egan Jones will provide a response to Jefferies letter later this week.
With the ratings notices, the TV appearances and Monday's letter, it's clear that a war of words has turned into a battle. At a time of widespread market fear and when many bank shares fall to 2011 lows, the stakes are critically high.
As of Monday trading, the letter seems to have stabilized shares - but they're still over 20% below the levels of $12.27 a share prior to Egan's ratings downgrade. After falling more than 4% in early trading to $9.60, Jefferies erased earlier losses and gained nearly 2% to $10.27 a share in afternoon trading. Meanwhile, the KBW Bank Index (BKX) is down over 2% to $36.47.
In its most recent quarter ended in August, Jefferies earned $68.3 million in profits, a slowing on earnings from earlier quarters in the year. About Jefferies's fourth quarter ending in November, Handler wrote that the bank "expect