Alex. Brown stock hits record high on rumors


Alex. Brown Inc.'s stock price surged to a record level of $46.25 per share yesterday, amidst continued speculation that the Baltimore-based investment banking firm will soon merge or be acquired.

Since the start of the year, Alex. Brown shares have risen dramatically while the stocks of competitors have slumped, in part because of speculation that the nation's oldest investment banking firm is negotiating to merge with a German or British financial institution.

In yesterday's trading, its shares rose another 7 percent.

Alex. Brown has declined to comment on the speculation.

In a statement issued in April, following a request from the New York Stock Exchange concerning its stock price increases, the company noted its policy was not to discuss stock activity.

Alex. Brown Chairman and Chief Executive A. B. "Buzzy" Krongard told The Sun last month, however, that he saw no advantages to merging the company with a larger, foreign institution. Other sources close to the company said they did not believe Alex. Brown was in any such negotiations.

Mr. Krongard attributed yesterday's $3 per share jump to investors who had previously incorrectly bet Alex. Brown's stock value would decline, and were buying back shares to avoid further losses, a process known as selling a stock "short."

Nearly 14 percent of all Alex. Brown shares had been sold short at the end of last month, Mr. Krongard told Bloomberg Business News.

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