Lehman’s stock dropped 15% after the firm tried to protest that it didn’t need to raise capital–it just might want to–and then, in a ballsy move, the firm doubled down and started buying back its own stock, so the shares only closed down 10%.
Now, the WSJ says, Lehman has given up on raising money in the US markets, which don’t seem too receptive, and is instead looking to Korea, where its vice Chairman is well-connected. The theory, apparently, is that capital will be too expensive in the US (in the form of dilution)–and, by extension, that capital will be cheaper in Korea. We’re not sure what Lehman thinks Americans know that Koreans don’t that will enable Lehman to raise capital there without diluting the holy hell out of itself, but perhaps there’s just solace in knowing that Korea is half a world away from David Einhorn.
The WSJ also speculates that Lehman may sell out to Stephen Schwarzman’s Blackstone Group, Citadel, or J.C. Flowers.
Lehman says it has trimmed its leverage from 32-to-1 to 27-to-1 by raising capital and selling $100 billion of assets. We wonder if this new ratio takes into account the big losses the company is expected to report this quarter.
Lehman’s Laughable Damage Control: Don’t Need To Raise Money, Just Want To
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