Posted on June 12th, 2008 in Daily Stock Market / Economic News - The Real Story
Forbes is sounding like a blogger!
I heard these rumors too and it makes sense. Lehman’s stock plummeted today far below the offering price of $28 on serious volume. As a matter of fact, as the stock began to fall and pick up steam, I also heard from very credible sources that a few of the larger subscreibers to the $28 offering got on the short side. This, in order to prevent any further losses and perhaps make a little on the run down. At this point in time, the trust is gone with Lehman. The investors in their offering last quarter are significantly underwater and Lehman has been exposed as a liar. If this deal does not go down tomorrow at $28, Lehman is in the kind of trouble that leads to bad things in this market.
“With its $4.0 billion common stock offering due to close Thursday, Lehman Brothers was battered by rumors of problems with the deal, and came under heavy selling pressure late Wednesday. Shares of Lehman (nyse: LEH – news – people ) closed down $3.75, or 13.6%, to $23.75, 15.2% below the $28.00 at which it priced the offering.
The losses accelerated into the close on what TradeTheNews.com called “vague chatter” that the capital raising plan had run into trouble. (See: “Lehman’s Bear Necessity”). The report said speculation suggests funds could renege on the deal before Thursday’s closing.
Such a turn of events could prove a devastating blow for Lehman, which has spent much of the past few weeks trying to shore up confidence in its balance sheet and liquidity position in the wake of the collapse of Bear Stearns. (See: “Lehman’s Confidence Game”)
Lehman will surely be a focus on Thursday, as will the rest of the financial sector, which was thrown for another loop Wednesday in a volatile week.”
On the Goldman from, I don’t care what type of ‘hedges’ they have had in place during the past year of credit market turmoil, they will take losses just like everyone else that were big mortgage players. Goldman played as hard as anyone else. I know this for a fact. If Goldman are exposed as liars in the next week, that would make for quite a shocking ‘event’ for those still drinking the Kool-Aide.
“Rumors that Goldman Sachs(nyse: GS – news – people ), virtually unscathed by the credit crisis to this point, could be report second-quarter write-downs June 17 may have had an impact, but were hardly the only cause for the selling pressure.”
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