Lehman Brothers to report two billion dollars in losses: report Mon Jun 9, 5:17 AM ET



NEW YORK (AFP) - Investment giant Lehman Brothers is set to announce losses surpassing two billion dollars for the second quarter or 2008 -- far more than the 300 million dollars predicted by analysts, the Wall Street Journal has reported.


The US financial daily reported on its website on Sunday that Lehman was close to raising some five billion dollars in fresh capital from various investors, in hopes of stemming a rumored liquidity crisis.

Analysts have said Lehman, like many of its rivals, is trying to weather a widespread credit crunch unleashed in part by the US housing slump.

The Journal reported that Lehman stock has lost about 50 percent of its value this year as investors fret over its exposure to the mortgage market.

any good penny stocks worth looking at?

Do not interrupt this as stock advise (in other words don't take my advise, do your own due diligence) , but perhaps Lehman might be a good "short" candidate or the purchase of some "puts" might be in order. There will be more "Lehmans" as the credit markets unwind.

Elizaabeth.....you were missed.

Good advice!

quote:

Originally posted by amral:
any good penny stocks worth looking at?

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Not that I can think of.. will check it out later for you if time permits...

a few years ago I bought some shares in a company lost quite a few dollars (Bestquipt Sports)

Still have those shares certificates, the company went belly up I think.

quote:

Originally posted by amral:
a few years ago I bought some shares in a company lost quite a few dollars (Bestquipt Sports)

Still have those shares certificates, the company went belly up I think.

................................................
That's the problem with small companies.

quote:

Originally posted by alena:
[QUOTE]Originally posted by amral:
a few years ago I bought some shares in a company lost quite a few dollars (Bestquipt Sports)

Still have those shares certificates, the company went belly up I think.

................................................
Hubby did that once and learned the hard way..

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Lehman Brothers removes finance, operating chiefs By JOE BEL BRUNO, AP Business Writer
Fri Jun 13, 2:58 AM ET



NEW YORK - The hope at Lehman Brothers is that a management shakeup Thursday will contain the damage of a stunning quarterly loss "” yet some on Wall Street fear this is one more step toward a more dramatic outcome for the embattled investment bank.


The ouster of Chief Financial Officer Erin Callan and Chief Operating Officer Joseph Gregory was an attempt to quell investor anger that Lehman's leadership has failed them. But, with a four-day stock plunge that wiped $4.5 billion from the investment bank's market value, it was unclear if the upheaval will be enough to satisfy critics.

"These people deserve to be fired," said Dick Bove, an analyst with Ladenburg, Thalmann & Co. "Their mistakes cost their shareholders billions of dollars in wealth." Lehman shares fell 4.4 percent Thursday to $22.70 and are down 30 percent this week. The decline is a blow to investors who bought into a stock offering at $28 earlier this week "” including BlackRock Inc. and former AIG chief Hank Greenberg.

Richard Fuld, who took the company public in 1994, has kept a low profile in recent days by refusing interviews and commenting only through a statement about the dismissals. There is growing speculation that Fuld "” the Street's longest serving CEO "” might scramble to find a major outside investor or negotiate a sale to avoid his own demise by Lehman's board.

Names from private-equity firm Blackstone Group Inc. to global bank HSBC Holdings PLC have been bandied about as possible suitors should Fuld want to arrange a buyer, though none are commenting on the possibility. Most analysts are confident that Lehman can survive on its own without a suitor, given the underlying strength of its business.

And while Lehman might have bought itself some more time by shaking up its top ranks, the question remains how much it has left.

"I think they have a few options, but they are becoming more and more limited as the stock is pressured," said Matthew Albrecht, financials analyst for Standard & Poor's. "It is hard to rule anything out at this point. Confidence in the firm is the paramount issue, and if your counterparties and clients don't have confidence than you can't do business in this market."

In Washington, Sen. Richard Shelby of Alabama, the Senate Banking Committee's senior Republican, said "I hope that Lehman comes out of the storm OK."

"It's very interesting in that Lehman Brothers ... keeps assuring everyone that they've got adequate capital and then they go to the market to get more capital," Shelby said in a telephone interview. "They're saying one thing and doing another in some sense and that has alarmed some people."

Confidence in the company eroded after it pre-announced a nearly $3 billion loss for the second quarter and unveiled a plan to raise $6 billion of fresh capital. Callan spent Monday trying to convince analysts that Lehman's books were in order and that the fresh dose of capital would allow traders to pursue new opportunities. But her pep talk failed and shares began to plummet toward a record low.

The uncertainty was compounded by the near-collapse of Bear Stearns under the weight of similar rumors last March. The Federal Reserve later stepped in to negotiate the investment bank's sale to JPMorgan Chase & Co.

The company has been under intense pressure of late, particularly from short seller David Einhorn of Greenlight Capital, who has been an outspoken critic of the firm's financial health and its public disclosures.

Einhorn declined to comment about the ousters.

Callan and Gregory join a long list of executives who have lost their job since global banks and brokerages began writing down nearly $300 billion of bad investments stemming from bad bets on mortgage-backed securities.

Others who have lost their jobs include Merrill Lynch & Co. CEO Stanley O'Neal, Citigroup Inc. CEO Charles Prince, and Morgan Stanley co-President Zoe Cruz.

Callan will remain with Lehman in its investment banking division, where she previously ran a group that catered to hedge funds before taking the CFO spot last September. Gregory, who has been with Lehman for more than two decades, will also remain with the firm in an undetermined position.

Herbert McDade, 48, will succeed Gregory. He was previously the global head of the company's equities division, a position he has held since 2005. Ian Lowitt, 44, the current co-chief administrative officer, will become Lehman's new CFO.

A spokesman for Lehman would not comment on the changes to Lehman's top ranks.

However, Chief Executive Richard Fuld said in a statement that removing Gregory from the COO job was "one of the most difficult decisions either of us has ever had to make."

quote:

But, with a four-day stock plunge that wiped $4.5 billion from the investment bank's market value, it was unclear if the upheaval will be enough to satisfy critics

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My gut feeling was right about this stock (posted on 6/9 above).