How Lehman Brothers became Bankrupt?

lehman brother share stock prices before they crashed to bankruptcy
lehman brother share stock prices before they crashed to bankruptcy

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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.

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Comments 12 comments

agvulpes profile image

agvulpes 8 years ago from Australia

G'day Mate,

I was watching the index on CNN the other night and it was just ticking downwards like the Doomsday clock counting down. Scary stuff even in Australia.


adrainsean profile image

adrainsean 8 years ago Author

These are delicate times better keep the money u have in your socks then to invest in stocks or shares...

careful...


pgrundy 8 years ago

Quite a roller coaster ride isn't it? I'm afraid it's not over by a longshot. Thanks for the hub! Hang on, it promise to be quite the circus!


adrainsean profile image

adrainsean 8 years ago Author

THE AIG have been saved by the support of huge pool of federal bank funds, tahnk god for that or else the stocks would have crashed further, the worst affected by lehman episode are mid-capital software and Bpo companies who had them as major clients and more importantly The common middle class man who had put money with faith in LEhmann brothers are the biggest losers .....which makes it much more scary...


nancydodds1 profile image

nancydodds1 7 years ago from Houston, Texas

Its nice hub! very interesting and good. Here i posted an hub about mortgage calculator http://hubpages.com/business/MortgageCalculator


ahmadnaim profile image

ahmadnaim 7 years ago from Earth in where people's smile is worthful than platinum

So what happen to Lehmann Brother asset?and Merril Lynch?Did someone or other big company has buy them? I hear about the aftermath attack on AIG? What was the story behind it?


adrainsean profile image

adrainsean 7 years ago Author

AIG was saved thanks to the Federal bank of US, while merril lynch was overpowered and has now been merged with a bigger firm . The lehman brothers has been split into two firms one with good credit which is taken by barclays and another part is has become a unreliable weak credited finance firm.....

stay put on for more news...may things chnage with election results


wiker 7 years ago

Is the federal bailout package going to work, not many really believe whats happening behind closed doors. The lid is yet to open fully ?


adrainsean profile image

adrainsean 7 years ago Author

it will but shall take a lot of time....nothing before the US elections though will work out...


prasetio30 profile image

prasetio30 7 years ago from malang-indonesia

Thanks for share, money crissis or financial is international problem. Although Lehman Brothers is bigger company but they can be bankrupt. Great hub


hafeezrm profile image

hafeezrm 6 years ago from Pakistan

A good hub for giving an insight to a company in trouble. There are various techniques for predicting bankrupty like Z-model but problem is that the troubles never come alone. Federal support is handy to bail out a company which is just on the edge and not deep-down.

Thanks for sharing your views with the readers.


adrainsean profile image

adrainsean 5 years ago Author

Thanks hafeezrm for your insightful input

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