Discussion in 'Stocks' started by ByLoSellHi, Jun 30, 2008.
Going down like the Titanic in last 21 minutes.
They have to raise more capital.
That's great news for Mike Mayo at Deutsche Bank, Herb Greenberg and for Blackrock. They can now all load up on this amazing value play at much lower prices
I know Doll of Blackrock was yapping about how people should dive right into financials this morning.
Mayo and Greenberg, too?
Punk Siegel has been saying "buy financials" since March.
Too many people are trying to pick the bottom. It might be best to either sit on the sidelines or short financials until the economy shapes up (or until the cows come home--whichever comes first.)
LEH for sale....
Lehman Drops to Eight-Year Low on Sale Speculation (Update3)
By Jeff Kearns
June 30 (Bloomberg) -- Lehman Brothers Holdings Inc. fell to an eight-year low on speculation the fourth-biggest U.S. securities firm may be sold for less than its market price, traders said.
Lehman lost $2.44, or 11 percent, to $19.81 in New York, the lowest since May 2000. The company's value has tumbled 70 percent from a record $45.5 billion on Feb. 2, 2007, ending today at $13.8 billion, according to data compiled by Bloomberg.
``We're hearing that there may be a possibility of Lehman being taken over,'' said Michael Nasto, the senior trader at U.S. Global Investors Inc., which manages $6 billion in San Antonio. ``There hasn't been any positive news on this firm for the last couple weeks and the value of the deal might not be in the best interest of Lehman shareholders.''
An index of financial stocks in the Standard & Poor's 500 Index slid 2.1 percent to a five-year low, dragged down by Lehman's slide and losses in MGIC Investment Corp., the largest mortgage insurer.
Andrew Gowers, a Lehman Brothers spokesman, said the company's policy is not to comment on rumors.
`Go It Alone'
Richard Fuld, Lehman's chief executive officer, said June 16 that the company didn't need to be acquired.
``With this franchise, strength and power, we can go it alone,'' Fuld said. ``But I have also said that we are a public company and if there is another model, or more importantly someone comes forward that we believe can create more shareholder value than our model can create, I clearly have the obligation to take that to the board.''
Fuld told executives at Putnam Investments that his firm has enough money to remain independent and that the stock may be undervalued, Putnam's Kevin Cronin said after meeting with Fuld and Lehman President Herbert ``Bart'' McDade today in Boston.
``They have a strong desire and intention to remain an independent firm,'' said Cronin, who helps oversee $180 billion as Putnam's head of investments. ``They're disappointed with the stock price and they think it's undervalued relative to their earnings and revenue potential.''
Cronin said his firm owns Lehman shares, bonds and convertible stock. Putnam held 4.58 million shares as of March 31, according to Bloomberg data.
The stock added 59 cents to $20.40 in trading after the close of U.S. exchanges. Leman was rated ``overweight'' in new coverage by Morgan Stanley, which said the firm raised enough money ``to absorb expected losses over the next two quarters.''
Lehman plunged 70 percent this year after reporting the first quarterly loss in its history and selling $6 billion of stock to shore up its funding. The Securities and Exchange Commission investigated whether traders spread false rumors about Lehman's solvency to profit from a drop in the shares, two people familiar with the probe said in March.
``The rumors around are that there are some firms making discount offers for Lehman,'' said Clarence Woods Jr., chief equity trader with Baltimore-based MTB Investment Advisors, which manages $12 billion.
The risk of Lehman defaulting on debt briefly rose. Credit default swaps gained as much as 15 basis points to 290 before falling back to 280, according to broker Phoenix Partners Group.
Options traders increased bets that Lehman will continue its retreat. Contracts conveying the right to sell the stock at $17.50 by July 18 more than doubled to $1.89. Trading of puts, which give the right to sell shares, exceeded calls, which convey the right to buy, by more than 6-to-1.
LEH & GS Monthly Charts...
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