Lehman Raises $6B in Capital after Reporting Significant Quarterly Loss
Hurt by losses related to trading and hedging, Lehman Brothers Holdings Inc. reported a $2.8 billion second-quarter loss, and announced that it has raised $6 billion to help it survive the collapse of the mortgage market.
Moody's changed Lehman's rating outlook to negative after the news broke.
Chief Executive Officer Richard Fuld, who said he was "very disappointed'' with the results, is adding to the $8 billion he raised since February to quell concern that the global credit-market contraction would bring his firm down. Banks and brokerages have raised more than $285 billion to make up for almost $390 billion in write-downs and credit losses since the start of last year.
Lehman Brothers shares slid about 10 percent before the bell on Monday. The stock last traded at $29 after closing Friday at $32.29.
"It's kind of sobering for people who have been listening to the company these last six to nine months that they had everything under control,'' said David Hendler, an analyst at CreditSights Inc. in New York. "It shows that the market continues to be difficult. I would say Lehman's probably not the only broker that has these kinds of pressures.''
Published on June 9, 2008
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