Why MUST Lehman Brothers File Bankrupcy TONITE?

Discussion in 'Stocks' started by aeliodon, Sep 14, 2008.

  1. Why must LEH file bankruptcy tonite?

    Is a bank run underway?

    Have creditors pulled their credit lines?

    What is the hurry?
  2. I agree, reminds me of Lairs poker.
  3. Same thing with the sale, why did the Gummint insist on a sale this weekend before asian markets opened?

    Unlike BSC, LEH wasn't facing a bank run and other banks never walked away from trading with them, and the discount window was always there.

    It doesn't make sense.

    If LEH goes to 0, I will have lost 1k - and I am glad I only took such a tiny position - best decision I ever made.

    I regret not holding MER instead, I had some MER longs as well.
  4. if no one will trade with you, you're sunk

    it's that simple

    doesn't matter if you're solvent.. if no one trades with you, you're sunk

  5. LEH is facing a downgrade of their rating which will increase the cost of borrowing to the point of taking away profitability.

    Even so, LEH has cash so instead of BK or a buyout that equals little shareholder value why not ride it out and see if the paper that LEH holds that is the question of valuation finds better pricing and perhaps LEH is able to find some shareholder value.

    I am not saying its likely much less that I think it will happen but I would not be supprised to see no BK if a deal is not worked out and LEH just opens tomorrow. Traders will most likely be confused as to what value to give LEH then. As long as the FED window is open and others are willing to trade with LEH there may be a light and weak pulse for a while. Perhaps long enough to find the cure.
  6. I am buying a block first thing tomorrow mornin.
  7. Yeah but no bank has walked away from trading with Lehman and no bank has indicated that it would walk away.

    And there hasn't been a run on the bank either - although there probably will be now that they have indicated that they will file bankruptcy.

    I understand the point about the ratings downgrade that 1reason stated - that certainly would've hurt but not crippled their business. Proper due diligence takes time and I think if LEH had one week to talk to potential suitors then maybe someone would've offered at least 4 or 5 dollars a share - maybe the Arabs or Chinese.
  8. Right which makes me question if they are really going to file. I think it makes the chances higher that a deal is done. At what price is a big question.

    Anyone wanting to buy LEH will have the motivation to move almost as fast as LEH will want to be bought out.

    Has the smell of a high risk bluff. Otherwise if your LEH why in the world would you be working on a Sunday night to file while your also in meetings to be bought out? Does LEH really have that many high level execs that they can be working on both things knowing full well that the rumor of a BK will hit LEH with the hammer of death if a buyout is not done??
  9. xednise


    All the potential buyers have backed away from any LEH deal without fed backing. The firewall is at MER, that's where the fed attention is focused. LEH is done.
  10. and to add more to the conspiracy,,, Mer got $29.00 and Leh nothing....wierd...or did they??
    #10     Sep 14, 2008