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Are Lehman Investors Confident In Fuld Or In A Sale?

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When Lehman announced it was firing chief financial officer Erin Callan and president Joseph Gregory yesterday, there was a lot of speculation about whether investors in its recent $6 billion sale of common stock and preferred shares might try to pull out. Couldn't these top level changes trigger some sort of material adverse change that would let investors back away?
Several big investors have now indicated that they are staying on a Lehman. BlackRock, former American International Group CEO Hank' Greenberg and New Jersey's pension fund have all indicated, either publicly or privately, that they are sticking with their investment commitments despite the fact that the share price has fallen well below the levels at which they agreed to buy. Blackrock has gone on record with comments supporting Lehman's "leadership," which these days basically means chief executive Dick Fuld.
But are these investors really backing Fuld and his newly announced team? The stock is up today by over 10% but at just over $25 per share it still has away to go before it climbs back to the $28 per share price investors in the $6 billion stock issuance paid. As a long-term investment, this might make sense. But perhaps what these investors are betting on is a buyout of Lehman.
"Lehman increasingly looks like it could be an acquisition bet," one merger-arb investor told us today. "I'd say that's the only short-term upside."

BlackRock Bought Lehman Shares, Confident in Leaders