Lehman Brothers is considering preannouncing its third quarter financial results today, Charlie Gasparino of CNBC reports. Lehman was schedules to release its earnings next week.
"From what I understand they are not going to wait that long because of the insane movement in their stock," Gasparino said.
Lehman's stock had fallen around 40% at one point today, and the cost of credit default swaps on Lehman's debt blew out 110 basis points.
Presumably the pre-announcement would contain news that is less dire than the worst market fears, which include higher than expected write-downs and an inability to raise capital to make up for losses. But not everyone believes that Lehman will pre-announce, and there is some speculation that Lehman itself could be spreading the rumor of a pre-announcement in order to create the impression that things are better than feared and boost its stock.
We asked an investor who has no position in Lehman, either long or short, why Lehman might start false pre-announcement rumors. Wouldn't they just further damage their credibility? His theory is that Lehman could simply be attempting to buy time while it raises capital, and needs to boost its stock price in order to complete asset sales and possibly price a capital injection.
"With this kind of volatility, you can't really price anything. Lehman is asking more for Neuberger than the total market cap of the company. It's got to be disrupting the negotiations," he said. Any move which stabilizes the prices at a higher level than today's lows would assist Lehman in making a deal.
Posted by guest , Sep 09, 2008 1:44PM
Too long, didn't read.
Posted by guest , Sep 09, 2008 1:46PM
sham wow! Hold the Mayo
Posted by guest , Sep 09, 2008 1:48PM
#1...you're a tool. I hope you die.
Posted by guest , Sep 09, 2008 1:50PM
@3
"#1"
...Stopped reading right there.
Posted by whatelseisgoingon , Sep 09, 2008 1:56PM
@4
"...Stopped"
...Stopped reading right there
Posted by guest , Sep 09, 2008 1:58PM
If I had $1 for every idiotic post in DB's comments section, I would lay them all out on the floor, coat myself in maple syrup and then roll around until all the dollars stuck to my body.
Then I would run up and down Wall Street shouting "Mayo, Mayo, Shamwow, Mayo, Shamowow, Lehman, Offer, Tiger, Mayo, Too long, Gasbag, Mayo, Shamwow, Billy Ash, Shamwow, Shamwow, Crabhands, Carney, Mayo, Mayo, Whitney, JPMorgovia, Shamwow, Mayo, Yummy, Yummy, Bess."
Posted by guest , Sep 09, 2008 1:58PM
You idiots ruin the purpose of comments. Fags.
Posted by guest , Sep 09, 2008 1:59PM
They mull pre-announcement... and the price falls another 6%. Let's go zero!!!
Posted by guest , Sep 09, 2008 2:00PM
Just another rumor no matter who floats it.
Still think LEH PR is "fair and honest" Carney???
where have they been???
MS
Posted by blndebnker , Sep 09, 2008 2:03PM
@6 - You made me laugh out loud.
Does anyone really think they are going to preannounce? Sounds desperate.
Posted by finance_baller , Sep 09, 2008 2:03PM
@6 dont forget 'egret'
Posted by guest , Sep 09, 2008 2:04PM
At 5 pm the old ship cook came in and said, "Boys its too rough to feed ya." At 7pm the main hatchway caved in he said, "Boys it was pleasure to have known ya."
Posted by guest , Sep 09, 2008 2:05PM
At 5 pm the old ship cook came in and said, "Boys its too rough to feed ya." At 7pm the main hatchway caved in he said, "Boys it was a pleasure to have known ya."
Posted by guest , Sep 09, 2008 2:05PM
@6 Jack Handy reference?
A smart man can pick up a grain of sand and envision an entire universe... A stupid man though will lay down in some seaweed and roll around in it. Then he will stand up and go "Hey, I'm vineman."
-Handey
Posted by guest , Sep 09, 2008 2:06PM
12, learn the lyrics. "Fellas it's been good to know ya."
Posted by guest , Sep 09, 2008 2:09PM
When does Cramer start yelling that you should keep your money in LEH, nothing to worry about a la his BSC sht show. Guy is a totalhack.
As far as as gasbag goes, he was extra sweaty this morning, i think he was under Dick Fulds desk.
Posted by guest , Sep 09, 2008 2:10PM
15 is lighter on his feet than 12...
Posted by guest , Sep 09, 2008 2:11PM
bazooka malfunction.
eyebrow default swaps rocketing.
pre-announcing BK this afternoon.
-retail
Posted by guest , Sep 09, 2008 2:12PM
Lighter on the "Post Comment" button too, looks like.
Posted by guest , Sep 09, 2008 2:14PM
It's gotta suck to be sitting on the LEH trading floor,wondering if the hedge funds are yanking their cash from prime brokerage.They have my sympathies.
Posted by guest , Sep 09, 2008 2:16PM
@18 - almost pissed myself on the "eyebrow default swaps rocketing".
Posted by guest , Sep 09, 2008 2:16PM
"Dude, Chinamen is not the preferred nomenclature. Asian-American, please."
Posted by guest , Sep 09, 2008 2:26PM
@20 amen !!!!
S&P in now press releasing on LEH. Putiing them on ratings downgrade watch. Large Q3 losses and inability to raise capital were reasons given.
Although they continue to view Lehman's near-term liquidity as satisfactory (and by near term i think they mean next 4 hours).
Posted by blndebnker , Sep 09, 2008 2:28PM
Oh man this is a shame. I would actually hate to see them go the way of the Bear. The carnage is just too much.
Posted by guest , Sep 09, 2008 2:33PM
@ 24 i do agree with you somewhat.
Fuld has to shoulder a lot of the responsiblilty for not getting something done. They have been in trouble since BSC went down and that was 6 months ago. Hope and prayer is not a strategy (sorry to sarah palin fans- just saying...)
CNBC, and crammer in particular, should be shot for the way they handled the whole LEH matter. Has Gasbags been right with anything he has reported on LEH? Sorry JC i know he is a fan of yours.
Posted by guest , Sep 09, 2008 2:34PM
WHat's worse is the timing. THe fed just bailed FNMA and FHLMC out. There's no way they'll remotely be connected with a Lehman bailout, even the type of "bailout" that Bear got.
I lost my shirt with that worthless LEH stock. Bought at $60 4 years ago and kept doubling down each time it dropped $10.
Posted by guest , Sep 09, 2008 2:37PM
Can you imagine the fights on the souplines between the Bear guidos and Lehman stuffed shirts? It would be like the Greasers vs Soc's.
Every person Ive ever dealt with from there is a tremendous prick, however for the good of the economy I hope they make it
Posted by guest , Sep 09, 2008 2:39PM
@26
You sound like the kind of person that would be interested in something Vince Offer is selling. Never buy a stock that's dropping. Don't you listen to Warren Buffet?
Posted by blndebnker , Sep 09, 2008 2:41PM
I just feel bad for the people. Sure many of them are pricks but so are many if not most of the people at my firm and probably everyone else's firm on this site. I got a glimpse of some of the wreckage left in the wake of Bear and it's sad.
Posted by guest , Sep 09, 2008 2:43PM
#28
The P/E ratios were too damned good at the time. And I figured, it's a massive company, where's it gonna go?
What I can't figure out is how the hell can the company's stock value be lower than the book value (Assets-Liab.) Are their assets that overpriced and their liab that under? I mean c'mon man, their Neuberger branch is worth more than the stock today.
Posted by guest , Sep 09, 2008 2:47PM
Crammer finally coming out and saying LEH is done and it is Fulds fault.
Holy Fuck i thought i would never see it!
Posted by guest , Sep 09, 2008 2:48PM
Cramer on now saying "People misunderstood what I said about Bear". Now basically telling people stay away from LEH
Awesome, you couldnt write this stuff
Posted by guest , Sep 09, 2008 2:51PM
It is a JOKE that S&P is putting them on ratings watch while they smilingly gave investment-grade ratings to garbage for YEARS. Now, KNOWING that a downgrade will add to the demise of a firm, NOW is when they step up? The horses are out of the barn, pal, don't shoot the stableboy running out last.
it would be one thing if S&P can claim insight, but if I were them I'd at least have waited until earnings came out. The timing just smells bad.
Posted by guest , Sep 09, 2008 2:56PM
@30
I'll tell you why you're wrong here. When an anomalous event occurs, all technicals go out the window. Valuations can not be trusted. The reason you think you can rely on P/E ratios the rest of the year is because everyone believes the same thing. The market is driven by the beliefs, and the perceived truths are instilled over time in a somewhat stable market.
What you're dealing with now is fear.
Posted by guest , Sep 09, 2008 3:02PM
#30, people don't know WHAT the liabilities are. When in doubt, people assume worse than the worst.
The market can deal with good news or bad news, but it abhors a vacuum. Ergo, a stock wtih a lot of uncertainty as to the full extent of its liabilities is in worse shape than a company that has already announced really bad results. Lehman has not disclosed what it really has in its vaults. If it got out in front of the news, it would be in better shape.
Posted by guest , Sep 09, 2008 3:29PM
Dick Fuld should get a guest spot on Cramers show for his ability to avoid logic.
#35, great point, a news vacuum. Why is Lehman's PR not filling it with positive (if meaningless) noise. Overwhelming information about daily events, as stupid as it sounds, would be helpful to them.
Posted by guest , Sep 09, 2008 8:37PM
@35 - the silence speaks for itself.
Posted by guest , Sep 10, 2008 7:31AM
Bake Sale to Save Lehman this AM- please buy bakery!