Lehman (LEH) May Raise Cash, Dilute Shareholders

Posted: August 4, 2008 at 1:34 pm

Lehman_brothersLehman (LEH) may have to raise several billion dollars. With its market cap below $13 billion, that could be painful for current holders of its common shares. According to Reuters, "Lehman Brothers Holdings Inc is expected to follow in Merrill Lynch & Co Inc’s footsteps and sell a lot of risky assets at a loss."

Lehman currently has $65 billion in mortgage-related paper.

With a share price of just over $18, bringing in another $5 billion could drive the stock closer to $10.

Douglas A. McIntyre

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