Saturday, March 29, 2008
Lehman Brothers - Good, Bad & Ugly
Lehman is in the news for three reasons. First the good news via AHN - Stocks on Wall Street rose higher led by Lehman, after Citigroup Inc. upgraded Lehman Brothers Holdings Inc. to 'buy' from 'hold' after reporting that the firm has enough cash to run its business. Lehman Brothers, which closed Thursday at $38.71, added as much as 5 percent during the pre-open market after Citigroup's analyst said the company's share price was "extremely attractive" and set a $65 target price for its shares.
Now the bad news about Lehman, from Tokyo, via Reuters - U.S. investment bank Lehman Brothers was defrauded of some $353.1 million after it was caught in a scam in Japan, a source familiar with the situation told Reuters on Saturday, and trading house Marubeni said some of its staff were involved...the fraud involved fake documents from Japan's fifth-largest trading firm Marubeni Corp.
Oliver Biggadike and Takashi Ueno, writing for Bloomberg News, say that Lehman plans to sue Marubeni . Marubeni, Japan's biggest petrochemical importer, is also a victim of fraud and was not involved in the transaction, the company said in a Japanese-language statement faxed to Bloomberg News. Takashi Hashimoto, a spokesman for the Tokyo-based trading house, declined to comment on Lehman's planned legal action.
And now for the ugly part about Lehman, coming, not surprisingly, out of Wall Street. David Scheer and Yalman Onaran, Bloomberg News, report that the Securities and Exchange Commission has expanded an inquiry into whether investors including hedge funds tried to manipulate Bear Stearns Cos. stock to also review a decline in Lehman's shares, said the people, who declined to be identified because the inquiry isn't public. The Lehman probe examines short sales of the company's stock, one of the people said. Lehman, the fourth-largest U.S. securities firm, has tumbled 26 percent this month amid speculation that Wall Street firms can't fund their operations.
Now go back up and read the 'good news', and you'll realize how Wall Street investors with a well established network manipulate the markets and stock prices daily. I bet there'll be at least a few handful who first shorted Lehman just before the rumors started spreading about Lehman's lack of liquidity, and also bet long just before Citi upgraded Lehman after ensuring their liquidity. They knew all the time that there was nothing wrong with Lehman, and it would eventually bounce back.
So if you're 'in the loop', you can make money coming and going by first shorting the stock, then spreading rumors, and then betting long on the same company just before it bounces back. Course, in the process, it destroys a lot of things, including investor confidence and spreading panic in the markets, not to mention lasting damage to Lehman's rep on the Street. But hey, anything for a quick buck.
Now the bad news about Lehman, from Tokyo, via Reuters - U.S. investment bank Lehman Brothers was defrauded of some $353.1 million after it was caught in a scam in Japan, a source familiar with the situation told Reuters on Saturday, and trading house Marubeni said some of its staff were involved...the fraud involved fake documents from Japan's fifth-largest trading firm Marubeni Corp.
Oliver Biggadike and Takashi Ueno, writing for Bloomberg News, say that Lehman plans to sue Marubeni . Marubeni, Japan's biggest petrochemical importer, is also a victim of fraud and was not involved in the transaction, the company said in a Japanese-language statement faxed to Bloomberg News. Takashi Hashimoto, a spokesman for the Tokyo-based trading house, declined to comment on Lehman's planned legal action.
And now for the ugly part about Lehman, coming, not surprisingly, out of Wall Street. David Scheer and Yalman Onaran, Bloomberg News, report that the Securities and Exchange Commission has expanded an inquiry into whether investors including hedge funds tried to manipulate Bear Stearns Cos. stock to also review a decline in Lehman's shares, said the people, who declined to be identified because the inquiry isn't public. The Lehman probe examines short sales of the company's stock, one of the people said. Lehman, the fourth-largest U.S. securities firm, has tumbled 26 percent this month amid speculation that Wall Street firms can't fund their operations.
Now go back up and read the 'good news', and you'll realize how Wall Street investors with a well established network manipulate the markets and stock prices daily. I bet there'll be at least a few handful who first shorted Lehman just before the rumors started spreading about Lehman's lack of liquidity, and also bet long just before Citi upgraded Lehman after ensuring their liquidity. They knew all the time that there was nothing wrong with Lehman, and it would eventually bounce back.
So if you're 'in the loop', you can make money coming and going by first shorting the stock, then spreading rumors, and then betting long on the same company just before it bounces back. Course, in the process, it destroys a lot of things, including investor confidence and spreading panic in the markets, not to mention lasting damage to Lehman's rep on the Street. But hey, anything for a quick buck.
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