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Lehman (LEH) is now playing games in an attempt to trounce shorts who, based on the firms results, have been correct in their analysis of the company.

One can argue that continuing to pay a dividend while raising capital in excusable. Many dividend stocks are in income funds that if they were to cease paying the dividend would be dumped, causing a further cratering of the stock price. For this reason, the argument does hold.

The can be no legitimate reason to repurchase shares while raising cash at the same time. Unless you are playing games..

The Wall St. Journal reported:
“The Wall Street firm’s shares had tumbled nearly 15% at one point Tuesday as investors who feared their stakes would be diluted sold shares and rumors flew on trading desks that Lehman had gone to the Federal Reserve for funds. Lehman said that wasn’t true.

But a second rumor, that Lehman was buying back shares, turned out to be true, people familiar with the situation said. Such buying helped the stock pare its losses Tuesday.”

It is one thing to repurchase shares because they are undervalued, it is another to do it simply to halt a slide in a single day. It is also irresponsible when most folks figure you are going to then turn around and dump these shares back on the market in another offering to raise more capital.

Now that the rumors are out there and at least this one is true, does Lehman really think it will not spur more conjecturing? The moves smacks of desperation and that in and of itself will lead people to now attemot to anticipate the real reason and what the next move will be.

Think about it. Financials are raising money at a discount to current share prices currently. What Lehman essentially did was repurchase stock it knows it will be forced to re-issue at a loss to whomever they get to provide them more capital.

Shrewed…

They can rail against Einhorn all they want and sit there and call him names, but, until their results refute anything he says, they will lose. Why? Currnetly their results are refuting everything they say…

Disclosure (“none” means no position):None

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Lehman (LEH) is now playing games in an attempt to trounce shorts who, based on the firms results, have been correct in their analysis of the company.

One can argue that continuing to pay a dividend while raising capital in excusable. Many dividend stocks are in income funds that if they were to cease paying the dividend would be dumped, causing a further cratering of the stock price. For this reason, the argument does hold.

The can be no legitimate reason to repurchase shares while raising cash at the same time. Unless you are playing games..

The Wall St. Journal reported:
“The Wall Street firm’s shares had tumbled nearly 15% at one point Tuesday as investors who feared their stakes would be diluted sold shares and rumors flew on trading desks that Lehman had gone to the Federal Reserve for funds. Lehman said that wasn’t true.

But a second rumor, that Lehman was buying back shares, turned out to be true, people familiar with the situation said. Such buying helped the stock pare its losses Tuesday.”

It is one thing to repurchase shares because they are undervalued, it is another to do it simply to halt a slide in a single day. It is also irresponsible when most folks figure you are going to then turn around and dump these shares back on the market in another offering to raise more capital.

Now that the rumors are out there and at least this one is true, does Lehman really think it will not spur more conjecturing? The moves smacks of desperation and that in and of itself will lead people to now attemot to anticipate the real reason and what the next move will be.

Think about it. Financials are raising money at a discount to current share prices currently. What Lehman essentially did was repurchase stock it knows it will be forced to re-issue at a loss to whomever they get to provide them more capital.

Shrewed…

They can rail against Einhorn all they want and sit there and call him names, but, until their results refute anything he says, they will lose. Why? Currnetly their results are refuting everything they say…

Disclosure (“none” means no position):None

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Looks like Einhorn was correct……despite Lehman’s (LEH) proclamations to the contrary.

Lehman has raised $6 billion in capital in the past year, including $4 billion last quarter. It is now looking at the need to raise another $3 to $4 billion.

CFO Erin Callahan has been the public face of the company during the crisis and has made statements that will now come back to haunt her. The firm is saddled with billions of dollars of illiquid commercial real-estate assets and leveraged loans and is expected to face further write-downs on these portfolios.

The Wall St Journal reported today
“During the second quarter, Lehman was stung by hedges used to offset losses in real estate and other securities, according to people familiar with the matter. The firm bet that indexes tracking markets such as real-estate securities and leveraged loans would fall. If that happened, it would book profits that would make up some of its losses from holding these securities and loans.

However, in an unexpected twist, some of the indexes rose, even as the assets they were supposed to hedge against continued to lose value or stayed relatively flat. Lehman’s losses from both write-downs on assets and ineffective hedges will likely top $2 billion, people familiar with the matter said.”

Just over a month ago Callahan was on CNBC and said at the time they did not expect to need the last fund-raising they did.

Now additional funds and further shareholder dilution are being needed. Someone will pay and you cannot just sit back anymore and blame short-sellers “spreading rumors”. When what you alleged to be “rumor” starts coming true, it now looks as though you are the not being totally honest.

Watch Einhorn express his concern about the company. Bartiromo tries to refute Einhorn but he makes his point nontheless. Who is looking more accurate?

I think it may not be too long before Callahan joins the latest list of casualties.

Disclosure (“none” means no position):None

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Looks like Einhorn was correct……despite Lehman’s (LEH) proclamations to the contrary.

Lehman has raised $6 billion in capital in the past year, including $4 billion last quarter. It is now looking at the need to raise another $3 to $4 billion.

CFO Erin Callahan has been the public face of the company during the crisis and has made statements that will now come back to haunt her. The firm is saddled with billions of dollars of illiquid commercial real-estate assets and leveraged loans and is expected to face further write-downs on these portfolios.

The Wall St Journal reported today
“During the second quarter, Lehman was stung by hedges used to offset losses in real estate and other securities, according to people familiar with the matter. The firm bet that indexes tracking markets such as real-estate securities and leveraged loans would fall. If that happened, it would book profits that would make up some of its losses from holding these securities and loans.

However, in an unexpected twist, some of the indexes rose, even as the assets they were supposed to hedge against continued to lose value or stayed relatively flat. Lehman’s losses from both write-downs on assets and ineffective hedges will likely top $2 billion, people familiar with the matter said.”

Just over a month ago Callahan was on CNBC and said at the time they did not expect to need the last fund-raising they did.

Now additional funds and further shareholder dilution are being needed. Someone will pay and you cannot just sit back anymore and blame short-sellers “spreading rumors”. When what you alleged to be “rumor” starts coming true, it now looks as though you are the not being totally honest.

Watch Einhorn express his concern about the company. Bartiromo tries to refute Einhorn but he makes his point nontheless. Who is looking more accurate?

I think it may not be too long before Callahan joins the latest list of casualties.

Disclosure (“none” means no position):None

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