Short Attack: Lehman Dead Duck

Major U.S. stock indexes turned higher in afternoon trading Thursday afternoon, in an excessively volatile session focused on Lehman Brothers (LEH) fight for survival, and trader attacks on Merrill Lynch (MER) and Washington Mutual (WM). Indexes turned higher amid market buzz that troubled investment bank Lehman, which is fighting for survival, is looking for a someone to help it bolster its tattered balance sheet. The shares came under selling attack Thursday amid continued doubts about the firm’s viability, continuing their declines from the previous three sessions. Lehman led the broader financial group lower Thursday, though the sector came off its worst levels of the day.

Lehman Brothers shares came under heavy selling pressure amid worries about the firm’s ability to raise capital. Goldman Sachs (GS) downgraded its rating on the shares to neutral from buy. Citigroup (C) and Merrill Lynch also reportedly downgraded the stock.

On Wednesday, Lehman posted a preliminary third quarter loss of $5.92 per share on net revenue of negative $2.9 billion. It also reported gross mark-to-market adjustments of negative $7.8 billion, said it would slash its annual dividend to 5 cents, spin off to shareholders $25-$30 billion of its of commercial real estate portfolio, and sell a majority interest in its investment management division. Lehman noted that it was committed to exploring all strategic options.

Who will be buying Lehman ??? I would stay away from Lehman. Not worth playing either side. From this point onwards its pure gambling game. Stay AWAY…Hint: Bear Sterns…..