Lehman (LEH) Wisely Leaks News of $5+ Billion Raise To Prevent Monday Disaster

Lehman Brothers (LEH) is putting the finishing touches on raising the $5+ billion of capital it says it doesn’t need, says the WSJ. The FT already reported the same news on Saturday. The deal will likely be announced Monday or Tuesday, but Lehman has intelligently leaked the news before the markets opened on Monday. The run on the bank that killed Bear Stearns took a matter of days, and Lehman is already several days into its own crisis.

Lehman has also conditioned the market to expect a $2 billion loss for Q2, a mere order of magnitude more than analysts were expecting. The capital raise will reportedly be mostly common stock, not the rights offering the firm was said to be considering last week. As a result, it will also likely be violently dilutive. But better anything than another Bear.

See Also:
Lehman Deathwatch: Analyst Says The Firm’s Clients are Getting Nervous
Lehman’s New Plan To Save Itself from David Einhorn: Rights Offering

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