“The biggest question with Lehman is a lack of confidence in the balance sheet," he says on Fast Money. "I just think with the size of their commercial and residential mortgage portfolio, investors don’t have confidence in what book value they’re buying.”
And then three's the billion dollar question on every investor's mind. Should you buy Lehman on anticipation of a takeover?
I'm skeptical," replies Harte. "I think a takeout is unlikely. As much as I look at Lehman at $15 and say there's much more value in the franchise then the stock price is representing I don't think they're going to attract buyers until they address their balance sheet issues."
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Trader disclosure: On Aug 22, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Karabell Owns (AAPL), (FMCN), (GLD), (GOOG), (JPM), (NOK), (SLB), (RIO), (WFR), (CHL): Tatro Owns (C), (GS): Quint Tatro Is The Principal Of Tatro Capital: Tatro Capital Owns (AAPL), (FXI), (QQQQ), (SPY), (T), (XLF): Jon Najarian Owns (SCHW) Calls, (AKAM) Calls: Terranova Owns (CME), (FCX), (YHOO), (SU), (AAPL), (EOG), (KOL), (GS), (NOV), (POT), (RIMM), (X), (SA), (VLO): Terranova Owns (AIG) Puts; Terranova Is Long October Crude Oil Futures; Terranova Is Long Crude Oil Time Spread (Long Dec. 2008, Short Dec. 2012); Terranova Is Long Sept. Mini SP Futures
Terranova Is Chief Alternatives Strategist Of Phoenix Investment Partners, Ltd.; Phoenix Investment Partners Owns More Than 1% Of (ABD), (ARE), (BRE), (CNTY), (CLB), (OFC), (DLR), (ESS), (EXR), (FL), (IAT), (IGE), (LNET), (MAC), (OIIM), (PSPT), (DBC), (DBV), (SLB), (SKT), (BLV)
Terranova Is Co-Portfolio Manager Of The Phoenix Diversifier PHOLIO
Phoenix Diversifier PHOLIO Owns (IGE), (DBC), (DBV)
Charles Schwab Is A Sponsor Of "Fast Money"
(MER) Is A Client Of Sandler O'Neill; (MS) Is A Client Of Sandler O'Neill
Sandler O'Neill Has Received Non-Inv. Bank. Comp. From (MER), (LEH)
(GS) Is A Non-Inv. Bank. Client Of Sandler O'Neill