Lehman Management Burning the Midnight Oil

Hopefully by this time next week the drama gripping Wall Street over the solvency of Lehman Brothers (LEH-NYSE) will be in the history books.

Of course, that might not please everyone. With Bear Stearns dead and buried, and the monolines yesterday's news, Charlie Gasparino's near term career prospect are, for better or worse, dependent on Lehman. Although he apparently can't deliver CEO Dick Fuld, and Maria gained Erin Callan's confidence months ago, Gasparino has his sources. And they are telling Charlie that Lehman might very well release, or pre-release, earnings early next week, instead of June 16th.

While I am not in possession of a smoking gun, or even a leaked memo, I am trying to connect the dots from Charlie to Bloomberg:

Lehman Brothers Holdings Inc., which some analysts expect will report its first quarterly loss since going public in 1994, may raise as much as $5 billion in capital by early next week, a person with knowledge of the matter said.

Executives at Lehman are in talks with at least one U.S. pension fund and an overseas investor on terms of a transaction, according to the person, who declined to be identified because the negotiations are confidential. A rights offering, in which existing stockholders would gain the right to buy shares at a discount, isn't in the current plan, the person said. Mark Lane, a spokesman for the New York-based firm, declined to comment. Bloomberg

A weekend spent shopping is probably not in the cards for Erin Callan, who apparently will be trying to sew up a deal that would, ideally, raise equity capital, and allow them to release earnings in one fell swoop. With any luck she can put this sordid affair to bed by the middle of next week, and we can all begin looking for the next big story.

I might do a little work on Greenlight’s long positions to pass the time, looking for stuff to shoot against. It is the American way, after all, although it might be easier to pick on his buddies Bill Ackman or Whitney Tilson. Those guys might be building street cred as good shorts, but their long picks leave me largely unimpressed. David Einhorn might want to forget about New Century Financial, but you have to at least question his judgment on that position.

Put a gun to my head and I will take value over growth, but with Bill Miller on life support, Tilson down 22% over the past year and Ackman mis-timing his entry into Target Corp., the cult of value is looking a little green in the gills.

Besides, if I need a rock star money manager, I can turn to growth manager Louis Navellier. His average investment thesis might not show the rigor displayed by the value guru’s, but at least he knows how to make money long, something the Value gang has not proven to be very adept at over the past 12 months.

In any case, TGIF. After a long, acrimonious week, I think Wall Street might need to lighten up a bit, and stop taking itself so seriously.

And, before I sign off, a compliment is in order.

Louie, Louie, way to go.
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Lehman in Talks to Raise $5 Billion of Capital, Person Says
Bloomberg
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The content contained in this blog represents the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author. No Positions

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