New York (HedgeCo.Net) – Shares of Lehman Brothers Holdings Inc. plummeted on Tuesday amidst increasing investor concerns over the bank’s ability to raise capital. The stock dropped 45 percent to $7.79 in early afternoon trading, marking the lowest level in more than decade for the company that has been pummeled by the credit crisis.
Lehman is expected to announce their third-quarter results on September 18. They were hoping to avoid another quarter of sharp losses, after having written down over $8.2 billion since last summer.
Some analysts are expecting Lehman to report losses up to $4 billion this quarter, with plenty more to come. Lehman still has holds about $65 billion in mortgage-backed assets that are continuing to lose value as the subprime fallout trudges along.
Hoping to quell a repeat of the Bear Stearns collapse, Legman has unsuccessfully tried to secure a major investor. Talks with state-run Korea Development Bank ended yesterday due to rumored lack of progress.
"Their talks had not developed to a serious level. There have been several investors who have been in discussions with Lehman other than us," said one Korean official.
Lehman has been in talks with Kohlberg Kravis Roberts & Co. and the Carlyle Group in regards to buying parts of its real estate and asset-management units.
Julie Scuderi
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