Lehman Brothersshares dropped more than 13 percent after a report of another possible capital raise added to questions about the credibility of the company's management.
The Financial Times said that Lehman had sought capital from Korean financial institutions, and may still enter a deal with them later this year.
Lehman shed 13.64 percent to settle at $23.75 on Wednesday.
That news comes just two days after Lehman raised $6 billion of stock and convertible preferred securities and said it expected to post a roughly $2.8 billion quarterly loss next week.
"They diluted the shareholders that much, and now they may need more capital? There's a real crisis of confidence in management here," said Bill Smith, chief executive officer of Smith Asset Management, which sold its Lehman shares at the open Wednesday morning.
A spokesman for Lehman declined to comment.
Lehman's shares dropped amid a broader decline in financial stocks after rumors swirled that Goldman Sachs could take write-downs.
A spokesman for Goldman declined to comment.
But Lehman's shares suffered the biggest decline among the top U.S. investment banks.
That's in part because of questions about the company's management, said Anton Schutz, a portfolio manager at Mendon Capital, which owns Lehman shares.
"Investors were really disappointed on Monday," he said.
Lehman's shares fell $1.21 to $26.29, reaching their lowest intraday level since mid-March, when faced a run on the bank and agreed to sell itself to JPMorgan Chase at a bargain price.
The company's shares have fallen more than 18 percent since Friday's close.