Lehman (LEH) Confusion Pounds Stock
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As usual, confusion is surrounding embattled investment bank Lehman Brothers (NYSE: LEH) as the stock looks like it badly wants to trade to toddler-levels (below $5).
Earlier, there were reports out of Dow Jones News that Korean regulators said talks with savior Korea Development Bank have ended. A later report from Reuters refuted this, saying Korean regulators denied they have commented on developments between KDB and Lehman.
No one seems to quite know what is going on with Lehman, which has investors very nervous.
There have been a few possible scenarios for Lehman, but with write-offs mounting-up investors want to see something before the company announces third-quarter results next week. One scenario for Lehman is to go with a 1980s 'good bank-bad bank' model, shifting $32 billion in commercial mortgages and other assets into a new company and getting investors to take a large stake in the spin-off. Lehman could also sell its Neuberger Berman investment management unit, which may be the easiest thing to sell but takes away major earnings power from the company.
Shares of Lehman are down 32% today to $9.60 per share.
Earlier, there were reports out of Dow Jones News that Korean regulators said talks with savior Korea Development Bank have ended. A later report from Reuters refuted this, saying Korean regulators denied they have commented on developments between KDB and Lehman.
No one seems to quite know what is going on with Lehman, which has investors very nervous.
There have been a few possible scenarios for Lehman, but with write-offs mounting-up investors want to see something before the company announces third-quarter results next week. One scenario for Lehman is to go with a 1980s 'good bank-bad bank' model, shifting $32 billion in commercial mortgages and other assets into a new company and getting investors to take a large stake in the spin-off. Lehman could also sell its Neuberger Berman investment management unit, which may be the easiest thing to sell but takes away major earnings power from the company.
Shares of Lehman are down 32% today to $9.60 per share.
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