How Lehman Brothers became Bankrupt?
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How did Lehman brother Got Bankrupt ?
The Lehman Brothers , one of the most reputed and fortune 500 ranked 17th best company crashed into bankruptacy at the Wall Street bank.This has been the biggest in its 158-year history,On Thursday, the company's shares plunged $3.17, or 44 percent, to $4.08 in pre-market trading. The famous Investment baking comoany has been one the highest transaction shares holding in NASDAQ, DOW . Last week Wasll street has ranked lehman brother alongside JP Morgan, Goldman sachs, and Barclays as the four piller of Nasdaq.
A estimated of $4.7 billion dollar of share holding of people all over the world have been lost in a single day in matter of minutes as the Sensex opened all across the globe the ripples of The effect could be felt. BSE sensex, and singapore sensex also fell by 3% and 4.3% respectively. The Indian software industry is also hit by this as companies like TCS, Amdocs has lehman brothers as their cheif client. The company had heavy shares in blue chips firms like Persistence and Sapient. Though it has been sepculated that lehman brothers are under loss but no one could have anticipated a billion dollar bull like them to get flat on nose without any back up plan once they lost 55 percent of its value over the last three days. Also the firm Merill laynch has been sold off today as a aftermath of Lehman, AIG the sponsors of Manchester United have freezed their market to attain stability too.
Effects On Stock Market and Share prices
Domestic realty stocks fell sharply on Monday, mirroring the larger trend on the bourse and concerns over tightening of liquidity in the real estate market after US investment bank Lehman Brothers Holdings Inc., an investor in some of these firms, said it intends to file for bankruptcy.The real estate firms involved said they would not be affected as Lehman's investments had already been credited to their
Not all is lost for the Lehman yet, they still have a has few options up withemselves. The U.S. government has now had a contengiency loan for Wall Street banks given to the fact the amount stake holder money involved the government might just bail them out this time . Lehman is that employees and money might quickly drain away if confidence in the bank continues to erode, one of the nation's largest investment banks.
The more practical solution would be to split itself into a good credit bank and a lesser reput bank which has deep debts.The majority stake which are still have good credit in Lehman brothers include the private equity groups Bain Capital, Hellman & Friedman and Kohlberg Kravis Roberts, the plan should be keep them isolated from the negative image of Lehman and let them grow independently to get the lehman's back on the track of recovery. The 1300 crore deal of DLF with Lehman brothers still stand while the major IT and ITES company from india are still under is doubt about their deals with their one of the biggest clients.