Investors fell for Legg Mason's past glory

Aaron Pressman

Last night's pre-announced earnings miss by Baltimore-based asset manager Legg Mason (Symbol: LM) has knocked the stock down 17% today and almost 40% from its all-time peak of $140 just 8 months ago. Back then, investors were euphoric about Legg's $4 billion deal to takeover Citicorp's iffy money management business. After all, who better to turn around the over $400 billion mess at Citi than Chip Mason, Legg's longtime CEO and the architect of some of the fund industry's most successful acquisitions, including Western Asset Management, Royce & Associates and Private Capital Management.

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