Published: Thursday, 15 Oct 2009 | 12:18 PM ET

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Shares of Lazard dropped as much as 5 percent Thursday following the death of the investment bank's chief executive, legendary Wall Street dealmaker Bruce Wasserstein.

Getty Images Bruce Wasserstein

The shares

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[LAZ  Loading...      ()   ] hit a low of $40.63 in morning trade before recovering to $42.36, down 1 percent, near midday. The stock has gained 38 percent so far this year.

Wasserstein's death Wednesday at the age of 61 left major questions about the direction and leadership of the investment bank he headed.

"The loss of Mr. Wasserstein will harm Lazard," said Richard Bove, an analyst with Rochdale Securities. "Mr. Wasserstein was the driving force behind the revival of the company, its public offering and its aggressive moves in recent years to grow once again."

"Lazard has an ample bench of very talented people that suggest that it can re-emerge as a major factor in mergers and acquisitions and restructuring after Mr. Wasserstein's death.

However, one must assume that the rebound will not be immediate," Bove said.

Lazard has more than 150 senior managing directors — more than three times as many as rivals such as Greenhill and Evercore Partners

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[GHL  Loading...      ()   ] —giving it a deep bench of talented rainmakers to bring in business, said JMP Securities analyst Michael Hecht.

Lazard said Steven Golub, vice chairman of the company, would serve as interim CEO. Other bankers, including Gary Parr and Terry Savage, are also under consideration for the CEO post, according to The Wall Street Journal.

"Any void in leadership creates uncertainty, and the market doesn't like uncertainty," said one trader who declined to be named because he was not authorized to speak to the press.

"The stock will likely face some pressure until the succession question gets answered and the new CEO spells out a strategy," the trader said.

Oppenheimer downgraded shares of Lazard to "perform" from "outperform," citing the near-term disruption of a CEO transition.

Lazard announced on Sunday that Wasserstein had been hospitalized for an irregular heartbeat and that his condition was "serious." But it said he was "stable and recovering."

On Wednesday the company said the cause of death had not been determined.

Wasserstein, known as "Bid 'em up Bruce" —a nickname he despised—had been involved in one of the year's biggest potential deals, advising Kraft Foods in its proposed takeover of British candy maker Cadbury.

"While Mr. Wasserstein was a tremendous figurehead and had a well deserved reputation as a brilliant dealmaker, we do not expect this event to have a material impact on Lazard's overall financial results," Collins Stewart analyst William Tanona said in a research report.

Forbes magazine recently estimated Wasserstein's wealth at $2.2 billion, ranking him 147th on its list of the 400 wealthiest Americans.

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