Vicious Rumors Do Lehman In Again
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This time, rumours have been spread that certain counterparties are no longer willing to trade with Lehman, and this caused the firm's stock to fall heavily Thursday, although it recovered to close down 12%, after both PIMCO and hedge fund SAC Capital came out and denied that they had ceased trading with the firm. Once again, it looks suspiciously as if unscrupulous short-sellers may be spreading false information in a bid to drive Lehman to the brink and clean up should the stock price hit rock bottom.
Lehman's stock has now fallen some 22% over the course of Wednesday and Thursday, closing Thursday at $15.40, a new 52-week low, having lost almost 75% of its value since the beginning of the year. Jim Cramer, host of CNBC's Mad Money and co-founder of TheStreet.com, suggested that Fuld should come out and stick his hand in his very deep pockets and buy one million shares in the firm to reassure investors he's confident about Lehman's future.
Finally, The Wall Street Journal reports that Wachovia introduced Goldman alumni Robert Steele, the bank's new CEO, to reporters Thursday. One of the first things he had to do was deal with the rumour that Goldman (which has been mandated to work with Wachovia on alternatives for its troubled asset book) was likely to acquire the whole bank. 'Some of the rumours that have been (swirling) around Goldman are just silly', Steele said. 'It's a one-shot assignment. It's not a prelude to anything. We're grateful for their help, but we have no intention of having a relationship other than client and service provider'. Steele, 56, could earn as much as $38m in his first year in charge - provided he hits certain keys targets.
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