Lehman Drops to Eight-Year Low on Sale Speculation
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Lehman Brothers Holdings Inc. fell to an eight-year low on speculation the fourth-biggest American securities firm may be sold for less than its market price, traders said.
Lehman lost $2.44, or 11%, to $19.81 in New York, the lowest since May 2000. The company’s value has tumbled 70% from a record $45.5 billion on February 2, 2007, ending today at $13.8 billion, according to data compiled by Bloomberg.
“We’re hearing that there may be a possibility of Lehman being taken over,” the senior trader at U.S. Global Investors Inc., which manages $6 billion in San Antonio, Michael Nasto, said. “There hasn’t been any positive news on this firm for the last couple weeks and the value of the deal might not be in the best interest of Lehman shareholders.”
An index of financial stocks in the Standard & Poor’s 500 Index slid 2.1% to a five-year low, dragged down by Lehman’s slide and losses in MGIC Investment Corp., the largest mortgage insurer.
