DealZone

At Lehman, a stunning loss leads to serious thought

lehman-1.jpgFrom the Iranian coffee cart guy to the Italian graduate student, almost everyone who walked past Lehman Brothers’ headquarters on a  windy Wednesday morning in New York seemed to stop and mull its future.

Philipp Steiner, a graduate student in entrepreneurship from Italy, walked up to Lehman’s offices at 50th St. and 7th Ave after reading news about the investment bank’s $3.93 billion quarterly loss on the famous news ticker a few blocks south in Times Square. There’s never such big news in Italy, he said. Still, he didn’t think Lehman bankers had too much to worry about, despite its troubles.

“I would see that as a good experience, and then move on to another job,” Steiner said.

lehman-2.jpgMoving on seemed a serious option to the Iranian coffee cart guy as well, who mulled Tuesday’s 45 percent plunge in Lehman’s stock price in an exchange with one of the firm’s employees.

“Can you believe the shares are now around $7?” he asked, as he handed the Lehman employee his coffee.  Seven cups would buy roughly one share of stock; last November, it would have taken 68 cups.

Raise or Fuld?

fuld2.jpgUncovering another dire quarter, with $5.6 billion in net writedowns and a worse-than-expected $3.93 billion loss, Lehman Brothers said it plans to sell a majority stake in its investment management division and spin off commercial real estate assets. The Koreans aren’t buying — they officially ran for the hills overnight — and Lehman also moved to dump other assets before announcing its results. It said in a filing it was chopping its stake in BHP Billiton almost in half, to below 3 percent. Back when Korea Development Bank was still interested in a Lehman stake, the word was that the two sides were having trouble agreeing on a price. Analyst Dick Bove said the bank was refusing to take what it believed were fire sale prices for its key assets. The question now is whether the offer of a majority stake in its investment division represents a change of heart — one that could smack of desperation for a market all too ready to believe the worst.

Other deals of the day:

* Coca-Cola plans to seek approval under China’s antitrust law for its $2.5 billion bid for top domestic juice-maker China Huiyuan Juice Group, the final obstacle to what would be the largest foreign takeover of a local firm, Huiyuan said.

* Infosys Technologies , India’s second-largest software services exporter, said it was confident its bid for Britain’s Axon Group would succeed and there was no rival bid on the table at the moment.