Lehman Brothers (LEH) was hammered yesterday on fears that the company will have to sell more equity in another emergency capital raise. The WSJ put the amount at a highly dilutive $4 billion of common equity on an $18 billion market cap–this after the firm has raised $6 billion in the past two months.
In typical fashion, however, Lehman comes out fighting, saying in a statement (per CNBC) that it doesn’t need to raise the money that it is only considering raising it because it might want to.
Please. Companies don’t dilute shareholders by 20%+ when their stocks are already down more than 60% from their peaks unless they absolutely have to.
Credit to Lehman for raising capital, unlike the corpse formerly known as Bear Stearns. And credit to the firm for understanding that preventing a run on the bank is all about perception. But of course they need the money, or they wouldn’t be considering raising it.