Lehman Brothers stock dropped precipitously Tuesday on concerns the bank won’t be able to raise needed capital. Then, kicking the company while it was down, Standard & Poor’s put Lehman’s credit rating on watch because of that decline in share price. Now Cramer’s thinking this stock will either be taken under like Bear Stearns or just go belly up.
Last Friday, Cramer urged Lehman to use the weekend to broker some kind of deal to help the company. But come Monday – despite all the developments with Fannie Mae and Freddie Mac – nothing had materialized. Cramer fears Lehman’s missed its chance. And unlike Dick Bove, the Mad Money host doubts there are any potential buyers for Lehman Brothers.
“[CEO Richard] Fuld had a chance. The chance is gone with Korea [Development Bank],” Cramer said. Talks with KDB have reportedly fallen through. “I don't think anyone else is interested.”
“This has become an extremely speculative security,” Cramer said of Lehman, “only for people who are willing to lose it all or make a little something.”
It might be hard to believe, but 99 Cents Only Storeshave raised prices. Regardless, Cramer said Family Dollar, with its strong August comp-store sales numbers, is the better name.
Elsewhere in the market, Apple CEO Steve Jobs’ health has been a subject of concern. Wall Street’s noticed the legendary tech guru’s weight loss, and there’s been speculation of just what kind of company Apple would be without him. But when speaking to CNBC’s Jim Goldman, Jobs said the rumors of his bad health have been spread by unnamed hedge funds and that he’s “doing just fine.”
That might be good for Jobs, Cramer said, but not good for Apple if hedge funds are out for its stock. If a hedge fund wants to hurt Apple, then “it’s history.” These are the same funds that are going after Washington Mutual.
“The unnamed hedge funds are in charge,” Cramer said. “And unnamed hedge funds are dangerous.”
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