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rffrydr
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 Posted: Wed Sep 19, 2007 6:50 am Post subject: Lehman (LEH) |
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The most mortgage exposed investment bank brings cheers before the Fed Cut:
http://www.ft.com/cms/s/0/63bda490-6534-11dc-bf89-0000779fd2ac.html
| Quote: | | Its earnings were boosted by a lower tax rate and the use of a new accounting rule allowing it to book as profits the reduction in market value of some of its debt. |
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HenryTo
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| Posted: Mon Jun 09, 2008 5:48 pm Post subject: |
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Morningstar on Lehman:
http://news.morningstar.com/newsnet/ViewNews.aspx?article=/DJ/200806091657DOWJONESDJONLINE000557_univ.xml
| Quote: | NEW YORK -(Dow Jones)- Just three months ago, a senior Lehman Brothers Holdings (LEH) executive said in private conversations that the bank didn't need capital from sovereign wealth funds that loss-plagued rivals such as Merrill Lynch & Co. (MER), UBS AG (UBS) and Citigroup Inc. (C) were turning to. Lehman, in fact, turned down approaches from overseas investors, the executive said.
On Monday, however, Lehman announced a dilutive offering of $4 billion of common stock at $28 a share - 62% below its 52-week high - and sale of another $ 2 billion of preferred shares yielding a higher interest rate than its common stock.
The sudden about-face by Lehman about its need for capital shows how difficult it can be for Wall Street firms to understand their portfolios and balance sheets.
Lehman raised $5.5 billion in debt earlier this year, and said it could have raised twice that much. An analyst Monday asked why the firm didn't use that earlier opportunity to raise more capital at a better price than this week, especially since Lehman would be selling assets absorbing losses.
"At the end of March we did not have the visibility on the loss that we ultimately suffered," Lehman Chief Financial Officer Erin Callan said in a conference call Monday. She also said selling assets wasn't the major cause of the loss. |
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HenryTo
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| Posted: Mon Jun 09, 2008 10:57 am Post subject: |
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Lehman further deleverages by selling $130 billion in assets. And yet, it is still not done.
http://www.bloomberg.com/apps/news?pid=20601109&sid=aAO2cp.0CcM4&refer=home
| Quote: | After the asset sales and $4 billion of Tier 1 capital raising during the quarter, Lehman's leverage ratio -- total assets compared with equity -- fell to 25 from 32 at the end of the first quarter, compared with 34 at Bear Stearns, 33 at Morgan Stanley and 24 at Goldman Sachs, the biggest U.S. securities firm by market value, data compiled by Bloomberg show.
Lehman may sell about $120 billion more of assets this year, Ladenburg Thalmann & Co. analyst xxx Bove estimates. With the planned capital boost, Lehman's leverage ratio would drop to about 15, based on Bove's forecast.
By de-leveraging, Lehman is reducing its chances of ever being as profitable as it was in 2006, said Michael Hecht, a New York-based analyst at Bank of America Corp. The firm's return-on- equity will be half its average of the past 10 years, according to Hecht. The decrease in risk taking by Lehman will inevitably mean lower profitability, according to Sanford C. Bernstein & Co. analyst Brad Hintz in New York. |
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HenryTo
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| Posted: Mon Jun 09, 2008 5:14 am Post subject: |
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| LEH down about 11% in pre-market trading as I am typing this. |
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HenryTo
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| Posted: Mon Jun 09, 2008 5:05 am Post subject: |
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Lehman to raise $6 billion through a preferred and a common stock offering:
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Lehman to raise $6 billion in capital
Monday June 9, 7:00 am ET
Lehman Brothers will raise $6 billion of capital to cover $2.8 billion second-quarter loss
NEW YORK (AP) -- Lehman Brothers says it will raise $6 billion through a stock issuance, and expects a second-quarter loss of approximately $2.8 billion due to more pain from the credit crisis.
The nation's fourth-largest investment bank said Monday it expects to post a loss of $5.14 per share for the quarter ended May 31. It made $489 million, or 81 cents per share, in the year-ago period.
Lehman says it will raise capital from both common and preferred stock. |
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HenryTo
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| Posted: Mon Jun 09, 2008 12:18 am Post subject: |
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Dan Fuss must be liking it - as Lehman chooses to do most of its $5 billion offering in common stock - the first common LEH stock offering since 1994:
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Lehman close to raising more than $5 billion: report
Monday June 9, 1:55 am ET
NEW YORK (Reuters) - Lehman Brothers Holdings Inc (NYSE:LEH - News) is close to raising more than $5 billion and is set to report a loss of more than $2 billion in the second quarter, The Wall Street Journal reported on its website on Sunday.
Fresh capital would come from investors including the New Jersey Division of Investment, which manages the state's $80 billion of pension funds, the paper reported, citing an unidentified source.
The final details of the capital raising were being worked out and could be announced Monday or Tuesday, the paper said.
The Wall Street investment bank also has strong commitments from C.V. Starr, the investment vehicle of former American International Group Inc. Chief Executive Maurice Greenberg, the paper said.
A foreign investment was also possible, the paper said, without giving further details.
The capital raising would come primarily through common shares, the first such issue since Lehman went public in 1994, the paper said.
Barclays Plc (LSE:BARC.L - News) also was moving toward raising capital from outside investors, such as those in the Middle East or Asia, the paper added, citing unnamed sources.
Neither Lehman nor Barcalys could be reached immediately for comment.
"Nothing really changed in Lehman's business model, but the market has changed and investors want banks to hold more capital, and Lehman and many other companies were caught flat footed," said James Ellman, president of Seacliff Capital in San Francisco, a hedge fund that invests in financial services stocks.
"For better or for worse, Lehman has lost control of its destiny. The central bankers and the credit markets control its destiny now."
The capital raising would come as banks have written off some $350 billion of mortgages and other assets hit by the global credit crisis, sold large stakes to foreign governments and slashed jobs.
Lehman had been expected to report quarterly results during the week of June 16, but media reports have said it may release its results early.
Wall Street analysts last week said they expected Lehman to incur losses from hedging in the second quarter amid an overall tough operating environment.
According to Reuters Estimates, analysts' average profit forecast for Lehman has fallen to break-even and, on an operating basis, a loss of 29 cents per share. A month ago, analysts had forecast net income of $1.13 a share. |
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HenryTo
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HenryTo
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rffrydr
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rffrydr
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| Posted: Tue Dec 11, 2007 12:35 pm Post subject: |
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Announces on thurs. Last Fed cut rallied and sold off the next day.
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