It sure looks like some investors and investment-banking types may have cheated in golf. No, not on the golf course, but trading in the shares of the country’s largest golf equipment maker, Callaway Golf, the creator of the Big Bertha driver.

That, apparently, is the suspicion of regulators at the New York Stock Exchange, which, The New York Sun has learned, has begun an investigation into trading in Callaway’s shares. The probe is focused on the period leading up to the company’s disclosures in late June – the kind that usually pump up stock prices – that it had received unsolicited indications of buyout interest and, at the same time, had hired New York investment bank Lazard Incorporated, to explore strategic alternatives, including a possible sale.

Officially, the NYSE declined to comment on the investigation. Unofficially, a Big Board regulatory source confirmed the probe, which, he said, was chiefly centered on trading in the first couple of weeks in June. That is all he would say on the matter.

Interestingly, in its investigation, the NYSE is going beyond its usual practice of simply asking the brokerage community to provide it with the names of people and firms who traded in the stock. This time, it’s also seeking the identity of anyone who had any contact with persons specifically involved with Callaway in an investment banking or advisory capacity.

Reflecting heightened buyout speculation, Callaway’s shares have risen sharply, climbing from a 52-week low of $9.28 to a 52-week high of $15.59, with roughly 35% of that rise occurring prior to the recent public disclosure that opened the door to a possible takeover. Given that kind of rise on no news, the clear implications are that somebody obviously knew something. The stock closed Friday at $15.24.

In late June, the Los Angeles Times reported that leveraged buyout specialist Thomas Lee Partners and insurance mogul William Foley II had offered Callaway $1.2 billion or about $16 a share to buy the company and take it private. Oddly, though, a Callaway senior vice president and spokesman, Larry Dorman, confirmed the offer, but he also said he had no idea when it was made or who received it. Further, he noted the bid had never been formally presented to the board.

These events all lead to the question of what happens now to Callaway and its shares. For investors who might be hopeful of scoring a hole in one – namely, by taking a flier on the stock on the prospects of an actual buyout of the company – analyst Casey Alexander, who tracks the firm for Gilford Securities, thinks a bogey is far more likely.

For starters, he doesn’t think there will be an acquisition. Pointing to the August 1 appointment of a new CEO at Callaway, George Fellows, a former Revlon executive, Mr. Alexander said he doubted a newly appointed chief executive would be willing to sell out until he puts his stamp on the company.

Likewise, he believes the number of strategic buyers of Callaway – those who would seek to buy the company in the hope of effecting significant cost savings – is limited. He notes, for example, that two potential buyers – Reebok and Adidas – are merging with each other, while another possible acquirer, Nike, has already said it isn’t looking for acquisitions. MacGregor Golf, mentioned as another potential buyer, is not taken seriously by Mr. Alexander. He believes a bid from MacGregor, which is much smaller than Callaway, would surely be rejected by Callaway’s management.

In any event, he believes the most Callaway would fetch in a buyout from a strategic buyer is about $17 a share, not too much higher than its current price. As for a financial buyer, one that would be limited in its ability to effect major cost savings, Mr. Alexander thinks a buyout price could maybe get to $16.40 a share.

Since he doesn’t see anyone buying Callaway, the analyst thinks investors would be ill-advised to view the company as a legitimate takeover candidate. Further, he believes if an offer is forthcoming and is rejected, “you could see the stock immediately falling about $3 a share.”

What about fundamentals? Here again, the analyst doesn’t like what he sees. Noting that the number of American golfers in recent years has been declining (now 18.5 million), he feels “the prospects for growth at Calloway are not particularly good.” To Mr. Alexander, who rates Callaway shares a sell, the bottom line for the stock is clear: “The downside risk is significantly greater than the upside potential.”