Lehman May Get Up To $6 Billion…Way to ‘Fulfill Investor Expectations’!

Posted on June 8th, 2008 in Daily Stock Market / Economic News - The Real Story

Just two months after Lehman ran to ‘TEST OUT” the new Fed Facility and just 30-days after we learned that they had fired up the CDO machine once again to create ‘investment grade’ securities for which to borrow against, they are raising $6 billion to be announced early this week, FT reports.

This will likely be portrayed by Lehman as ‘satisfying investor expectations’. This is because the street already thinks that they need money badly. But, if they really don’t need money and everything is peachy at Lehman, then that expectation will be dashed. Perhaps, in raising $6 billion and further diluting shareholder equity, shareholders will be happy and rally the stock in a vote of openness, confidence and thanks!

Lehman is working on plans to announce early next week that it is raising $5bn-$6bn in fresh capital as the bank discloses a large second quarter loss, people briefed on the matter said.

The earnings announcement, which had been expected for the week of June 16, is likely to be brought forward to address persistent rumours in the marketplace about Lehman’s financial condition. Lehman declined to comment on the timing of its earnings announcement or any capital raising plans.

People briefed on the matter said they expected Lehman to announce earnings and the capital infusion at the same time, perhaps as early as Monday or Tuesday.

These people said the capital infusion may include one or more US institutional investors, such as big pension funds, and one or more foreign banks, possibly from South Korea or Singapore.

Names mentioned by market sources as possible investors in Lehman include DBS, the Singaporean bank, Korea Development Bank and Woori Financial Group of Korea. All have declined comment or could not be reached.

In the US, market sources have mentioned Calpers, the big California public employee pension fund, as well as the New Jersey Division of Investment.

CV Starr, the investment vehicle of Hank Greenberg, former chairman and chief executive officer of AIG, has also been mentioned. All have declined to comment.

The capital raising is expected to come as Lehman, led by chief executive Dick Fuld, discloses a second quarter loss, the first in its history as a public company, driven by markdowns on mortgage related assets and a decline of $600m to $700m on certain hedging positions.

Lehman has consistently maintained that it does not need to raise capital.

Source: FT.com http://www.ft.com/cms/s/0/51c1624c-3417-11dd-869b-0000779fd2ac.html

14 Responses to “Lehman May Get Up To $6 Billion…Way to ‘Fulfill Investor Expectations’!”

  1. Good Lord! This day, 08June08, US forclosure and GAS price both hit all time high…

    2008 will be the beginning of GREAT MOTHER OF ALL Dismal.

    Consuming based economy system is basically pushing US into one of the poorest countries in the world.

  2. wtf????

  3. http://www.foreclosurepulse.com/archive/2008/06/05/39810.aspx

  4. I am going LONG on prositutes and beer. They seem to be the only 2 things the US still produces.

    Agree Feng, we have completely sold out our country, the futures of our children and our entire manufacturing base to make the top 1% of our country a little richer. Is anyone else just completely disgusted??

  5. Landsource is going BK. The advisor to Calpers, San Francisco-based MacFarlane Partners, got them into the deal.


    When it rains, it pours.

  6. Here,in the UK,builders and bankers are STILL in deep denial as to anything is wrong.Building are being built at breakneck speed in even the most deprived areas of the UK,yet unwanted houses,apartment and retail units are mere metres away.The banks supporting this are indeed in big trouble and the trouble that will pop,after the liars have gone quiet,will make the USA look like a picnic.Our media in the UK constantly paints a rosy picture.

  7. Is anyone watching “bubblevison” this a.m.? they actually have the gaul to say maybe Einhorn was right!?!?! and have used the word “vindicate” (sp?) OMG! These people are just asses (as we all know) but jeeze how do they look in the mirror?

  8. Sell your US dollars and buy physical gold and silver. It’s looking more and more like the end of the world for our financial wizzards. Inflate or die for the FED. And for the banks ? Dilute or die.

  9. My friend on Wall Street quit his USD300K job and picked up a job in Singapore.

    Some believe that NYC is gonna be the next Detroit.

  10. Let the Wall Street guys pump themselves and make themselves believe US is still in a sound tract of recovery.

    Good job, suckers, thanks for abandoning Mr. Ron Paul and select Senator Maccain or Obama.

  11. You guys are on the right track – BUT you can go down the track a few more miles and SEE! (what happens at The End)! 😉 Here:

    http://novalight.org (click on Blog for the Trailer)

  12. Ironic that Lehamn ends up raising 50% more capital than anticipated eventhough they’ve said “we don’t need any additional capital”.

  13. Lehmann, et al need so much capital that the Whirly Ben presses cannot possibly keep up with the demand! Ever wonder what happens to all the $Billions (soon $Trillions) of ‘Writedowns’? Who’s getting fleeced? (besides the sheeple).

  14. 6 billion for a 6 trillion fiasco. Wow ! Great leverage. 1/1000 of the problem has been solved. The game plan is still “dilute or die”. Nice useless bandaid. Did they really lose ONLY 2,8 billion. Nah! It’s probably 6 billion. 🙂

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