Lehman Brothers Holdings Inc., looking to quash rumors that it may be facing a liquidity crunch similar to the one that claimed rival Bear Stearns & Cos., said Tuesday that a planned stock offering had been boosted from $3 billion to $4 billion amidst “substantial interest” from investors. Via Bloomberg:

Investors paid $1,000 for each Lehman preferred stock, which can convert to 20.0509 common shares once the stock reaches $49.87, or 32 percent higher than yesterday’s closing price. “There’s a $4 billion bet that the shares are going to rise to that level,” said Andrew Corn, CEO of Clear Asset Management in New York, which owns Lehman shares. “They had to do it to not only quell criticism but also it seems they needed to raise capital. The market loves the fact that this has been done.”

No kidding. Lehman’s stock shot up after the announcement, and was at $43.05 when this story was published, up 14.37 percent. “The significant oversubscription for this deal demonstrates the confidence that investors have in Lehman Brothers,” said Erin Callan, the company’s CFO. “The success of the transaction is also reflective of the strength of the business model, the capital base and liquidity profile of the firm as we continue to successfully weather challenging environments.”

Most Popular Articles

CFPB to consider changing or eliminating TRID rule

The CFPB has been taking a long, hard look at some of its rules and regulations. Next up on its list to review is TRID, and it looks like eliminating the rule entirely is not off the table.

Nov 20, 2019 By

Latest Articles

Americans are staying put in record numbers

The share of people who moved in the 12 months through March fell to the lowest level on record, adding to the woes of a housing market plagued by supply shortages.

Nov 21, 2019 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please