If the rumors are true, then Lehman Brothers CEO Dick Fuld may be about to embark on the biggest (and most daring) trade in his long, and mostly illustrious, career in the financial markets.

Former bond trader Fuld is said to be mighty miffed that his firm's bargain basement stock price could result in a rival firm making an opportunistic bid and securing the Lehman spoils at a deep discount. With the stock price down around 80% this year, Lehman's current market value is roughly equal to the estimated value of its investment management unit, Neuberger Berman, alone (Neuberger is valued at between $8 - $10bn). Fuld's thinking, so the rumors go, is that he won't just sit back and allow the likes of Barclays, Deutsche Bank or HSBC to pick up his firm on the cheap. Instead, he'll arrange the funding of a management buyout, and take Lehman private.

Now having said this, there is no real indication that even the most financially healthy of Lehman's rivals would be prepared to come in with anything like a meaningful bid at this stage. But any deal would also take an age anyway, as the due diligence would drag on interminably, and the last thing Lehman needs now is a protracted sale. (Worse, of course, would be an interested party who backed off after due diligence). But there's no doubt that Lehman is currently suffering death by a thousand cuts, and that the current situation cannot be allowed to persist. In the end, Fuld may have no choice but to grasp the buyout nettle.

And then there's the small matter of raising the finance during these difficult times. Although not easy, Fuld, however, has the credibility and contacts to pull this off. And, if it came to it, he could later sell the investment management business to reduce the debt Lehman's management would need to take on to acquire the firm. Selling Neuberger Berman would clearly impact the firm's revenues and profits (especially in the short-term), but a private Lehman would not be under the microscope as the public firm is now.

Fox-Pitt Kelton analyst David Trone first floated the 'going private' idea earlier this week, saying: 'Lehman's best course of action would be a 'going private' transaction, since it is the public equity markets that are the threat to the company's survival. Without a public stock, there would be no shorting, thus no motivation for rumor-mongering, thus no source to spook the counterparties and creditors'. Lehman, then, would be able to fix its problems in private without distraction. And Fuld would be able to focus on the business at hand, rather than just stare helplessly at his firm's share price.

Times are really tough now over at Lehman, but Lehman is one of the toughest firms on the Street, led by the toughest old boot of them all. And if anyone can pull off possibly the most daring trade of all time, it will be Dick Fuld.

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