Lehman Raises $6 Billion After $2.8 Billion Loss
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Lehman Brothers Holdings Inc. raised $6 billion to help survive the collapse of the mortgage market after reporting a $2.8 billion second-quarter loss, the first since the company went public in 1994.
The fourth-largest American securities firm fell 8% in New York trading after selling common and preferred shares at a price 13% below the close on June 6. The New York-based company sold about $130 billion of assets in the quarter and cut mortgage-related holdings and leveraged loans by as much as 35%. The 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. Lehman’s loss was three times bigger than the most pessimistic analyst surveyed by Bloomberg, though it was still just one fifth the losses reported by rival Merrill Lynch & Co.
“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,” an analyst at CreditSights Inc. in New York, David Hendler, said.
