Lehman Saga Continues

Source: http://www.zacks.com/stock/news/14359/Lehman+Saga+Continues
Posted on Friday, August 22nd, 2008 | In Stocks to Watch

Contributed by: Zacks Market Commentaries (http://www.zacks.com/) -

Yesterday, it was reported that beleagured U.S. investment bank Lehman Brothers Holdings (LEH) may not be receiving its hoped-for $5 billion bailout from the Korean Development Bank (KDB). No public statements were issued, but we did point out that a former Lehman executive had left the firm earlier this year to head up the KDB. So we knew we didn’t have the full story as of yesterday’s close.

However, before the market opens today, new speculation surfaces that Lehman could become a hostile buyout candidate. Who might buy them out, you ask? Why, none other than the Korean Development Bank. Shares of LEH shot up 11% in pre-market trading, or $1.50, to roughly $15.25 per share.

This would bring a major investment portfolio to the Far East country of South Korea, though Lehman is rife with problems that have been well documented. Analysts continue their swarm to downwardly revise estimates for both the company’s third quarter (ends August) and fiscal year 2008 (ending November).

We don’t know whether to make more of this new development than we did of yesterday’s contradictory news story, so we will do our best to keep up to date either way. Lehman Brothers currently rates a Zacks Rank #4 (Sell).

“LEH” Free Stock Analysis: Buy? Sell? Hold?
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