The Pressure Mounts, But Lehman Says It Has Many Options
More in BUSINESS NEWS
back-up- 'Their Staff...Were Making A Lot More (Than Ours). That Won't Last'
- The So-Called 'Greedy' Lehman Bonus E-Mail
- Support Staff Need Not Wait To Get Their Reward
- CenterFuld - Lehman Boss In The Dock
- The 2008 Best CTO / CIO Poll - First League Table
- M&A - Top Dogs Around The World
- An Oldie, But Goodie During These Difficult Times
- Richard Fuld's Statement To The Congressional Committee (In Full)
- Citi Sues Over Wachovia - For $60bn!
- Fear Not, There Are Jobs Out There
- Featured Recruiter - Martin Ward Anderson
- If Your Firm Was A Monopoly Property.....
- Click Here To Register For Free News E-Mail Alerts
- 'Never Mind Your Bonus' - The First Here Is The City Book
- Layoffs - The Definitive Job Loss League Table (The Very Latest)
- Top Firm Accused Of Bringing Down Lehman
- Top Boss Says Bonuses Will Be 'Solid', But 'Smaller'
- Hedge Fund Makes Single $2.5bn Winning Trade
- 'This Was As Cogent A Case Of Murder As Might Be Imagined'
- 'This Hodge-Podge Of Regulations...(Will) Put Many (Banks) Off Participating'
- Wacha-Gotcha-Notcha-ovia - Bun Fight For Wachovia
- Top Worldwide M&A Legal Advisors - Year To Date
- Citigroup Threatens Legal Action Over Wachovia (Citi Statement)
- Wells Fargo Press Release On The Wachovia 'Acquisition'
- Owed Money By Lehman, & Are Struggling To Find Out What's Going On ?
- Out Of A Job, Out Of Pocket & Out For Blood
- 'In The Land Of The Laid-Off, The Hiring Firm Is King'
- UBS Confirms 2,000 Job Losses / Closure Of Commodities Unit
- A Wall Street Funny
- Worldwide M&A League Table - Year To Date
- Super Hedge Fund Manager Continues To Defy The Odds
- Fuld, Thain, BNP, SocGen, Morgan Stanley, Raymond James, Shorts
- 'My Firm Will Never Fire Me. I'm Untouchable!'
- 'I Felt Sick When I Saw Them Taking Down The Lehman Signage'
- More Writedowns Expected, Hedge Funds Suffer
- 'We Need A Reality Check'
- 'There Is Only One End To The World, And This Isn't It'
- Top Firm Said Close To Cutting 1,900 Jobs
- 'Masters Of The Universe' Should Give Back Their Bonuses
- Bank Makes Paper Loss Of $506m On Morgan Stanley On First Day
- Citi Acquires Wachovia Units
- Unemployment, Depression & Suicide - Bankers In Crisis
- 'During This Difficult Conversation With Me, He (Dick Fuld) Cried'
- Fortis Rescued, As Parts Of ABN Will Be Sold Again
- And The Financial Markets Institution Of The Year Is....
- Investment Banking Is Just Like Marriage - Divorce Is Painful
- Citi's Board Said To Be Considering Big Acquisition
- Statement By US Treasury Secretary 'Hank' Paulson
- Some Of Your Views On Recent Events
- 'At Worse, As In The Depression, The Economy Collapses'
Related Content
- Brokeback Lehman - Fooling While Lehman Implodes (Video Funny) (16/09/2008)
- Pressure Grows On Goldman (16/08/2008)
- Lehman - Endgame (12/09/2008)
- What Next For Lehman Brothers ? (14/09/2008)
- Vicious Rumors Do Lehman In Again (10/07/2008)
- Why Would Anyone In Their Right Mind Buy Lehman Now ? (23/08/2008)
Lehman, it seems, has come a cropper after further asset writedowns and ineffective hedges (The Financial Times puts the losses from ineffective hedges down to between $500m - $700m). The firm's shares are down over 50% this year, falling again Tuesday by 9.5%, and currently trading at their lowest level for 5 years. Lehman has said, however, that an additional capital raising is just one of 'dozens' of options it has, and this view is supported by Fox-Pitt Kelton analyst David Trone, who said: 'In our view, there is no immediate need to raise equity capital, and the company would only take this painful step in an effort to cease the drumbeat of negative perceptions'.
There's also speculation that, given that the fall in the firm's share price might make it more difficult to raise capital, Lehman may be looking for a strategic partner to make an investment in the firm. South Korea's Korea Development Bank and Woori Financial Group have been mentioned in this light.
Lehman was forced to come out Tuesday and deny that it had been borrowing from the US Federal reserve and said that it had last accessed the discount window for 'testing' purposes on 16th April. The firm said that its cash holdings had actually increased. Citing unnamed 'people with knowledge of Lehman's activity', CNBC reports that the firm had been in discussions with potential buyers (like BlackRock) of some of its harder-to-value (more risky) assets. CNBC also says that its sources claim that Lehman instructed some of its prop trading desks not to take any new positions in the last week, whilst scaling back the activity and eliminating other desks completely.
Standard & Poor's cut Lehman's outlook earlier this week, together with Merrill Lynch and Morgan Stanley. The credit rating agency said in a statement that 'the outlooks on the large financial institutions sector in the US are now predominantly negative'.
