Lehman Bros. announces $2.8B loss

0 Comments | USA TODAY, June, 2008 | by Greg Farrell

Determined to avoid the fate of Bear Stearns, which collapsed in March, Lehman Bros. pre-announced on Monday a second-quarter loss of $2.8 billion and said it raised $6 billion in new capital.

Shareholders reacted by selling off their shares, driving Lehman's price down almost 9% to $29.48.

But some analysts commended the firm for addressing the biggest questions hanging over it.

"This is the lesser of two evils for shareholders," said David Trone of Fox-Pitt Kelton.

Lehman's first quarterly decline since it was spun off from American Express in 1994 stemmed from trading losses, asset write-downs and hedges that didn't work out. The bank also aggressively sold troubled assets during the quarter, including $130 billion in real...