- White House to Crank Up Pressure on Mortgage Industry
- Treasury Threatens Banks, Not Borrowers
- Dubai World to Restructure About $26 Billion of Debt
- Cramer: Dubai Can’t Sink These 6 Dividend Stocks
- Bove: 26 Banks May Need To Raise More Capital
- Lesson From Dubai: Start Cutting Risk In Your Portfolio
- Iranian Seizure of British Yacht Pushes Oil Above $77
- Should Homeowners Be Able to Stop Paying Mortgage?
- Buffett's Predictions For Next Year—And Every Year
- Treasury Threatens Banks, Not Borrowers
- We're Approaching a Market Bubble: Portfolio Manager
- Hershey Shares: What Options Are Saying
- Nov. 30: Unusual Volume Leaders
- Why Careful Shoppers Are Great for the Box Office
- Blue Nile CEO: 'We're Having the Best Cyber Monday Ever'
- Best Online Retailers to Buy Now: Internet Analyst
- ESPN The Magazine’s Body Issue: A Financial Success
- Cyber Monday: The Last Vestige of Dotcom Hype
MOST SHARED
- Timeless and Time-Tested Warren Buffett Watch Predictions
- Should Homeowners Be Able To Walk Away From Mortgage?
- Goldman Sachs Party Ban: No Gatherings of 12 or More
- Dubai World Set to Restructure About $26 Billion of Total Debt
- Blue Nile CEO: 'We're Having the Best Cyber Monday Ever'
- Treasury Threatens Banks, Not Borrowers
- Oil Demand Sees Year-Over-Year Rise, First Since 2007
- Bove: 26 Banks May Need To Raise More Capital
- Nov. 30: Unusual Volume Leaders
- Notre Dame Fires Charlie Weis After 5 Seasons
Text Size 
Executives at Lehman Brothers, the embattled securities firm, are weighing whether to pre-announce the firm's second-quarter results in an effort to dispel market rumors that the firm is facing a liquidity crisis, people close to the firm told CNBC.
 |
Bert van Dijk Lehman Brothers |
Lehman has traditionally released its earnings for the second quarter during the week of June 16, which is in two weeks. But people close to the firm say executives are considering whether to move those earnings up, possibly to next week.
The earnings announcement, these people say, would likely come in conjunction with a move by the firm to find new capital.
CNBC has learned that one new capital-raising option now being discussed is something similar to what's known as a "rights offering," whereby Lehman would approach existing shareholders and get them to buy stock in the company, possibly at a discounted price.
Lehman [LEH
Loading...
()
] had no comment.
People close to the firm tell CNBC that Lehman is considering several ways to raise new money to address fears by some investors that the firm is under-capitalized and could be suffering from a liquidity crisis.
During its earnings announcement, the firm is expected provide details on its recent effort to "deleverage," or massively reduce the amount of money it borrows from outside sources to fund operations.
An internal Lehman memo obtained by CNBC shows that Lehman has reduced its levearge up to 25 percent over the last quarter. The memo also said that Lehman was buying back only small amounts of stock as part of a regular buyback program. Newspaper reports stated that the recent spike in shares of Lehman was the result of a recent massive buyback effort.
Lehman has been under a cloud since Bear Stearns imploded, and short-sellers began targeting the firm as the next major financial institution to implode. In recent weeks, the firm has been the target of short-seller David Einhorn, who has said the firm underestimated the amount of problem assets on its books and would have to writedown much of this bad debt, leading to fears of a liquidity crisis at the firm
Lehman has said that it isn't suffering a liquidity crisis. That said, the firm still faces an uncertain future. It's likely to announce a second-quarter loss. The reduction in leverage and risk-taking is likely to lead to lower profit margins for the firm.
Print
Email
- Ever wished your cab driver would stop chatting and just get to where you're going? Well, that moment is closer than ever.
- UPS is giving its customers the option to offset its carbon emissions when sending a package.
- Romania's presidential campaign has been rocked by a video that may show the president striking a 10-year-old boy.
- Raising alligators is hard work, and the fickle taste of rich consumers has just made it much harder, says the NY Times.
- A recent issue of ESPN Magazine was one of its top sellers ever, and it only took scantily clad athletes to make it happen.
- The continued real estate boom in China is partially fueled by a generational flood of newlyweds.
Data is a real-time snapshot *Data is delayed at least 15 minutes