Shares of Lehman Brothers Holdings were down as much as 48% in intraday trading today amid fears the fourth-largest U.S. investment bank and a big player in the mortgage securities market might face liquidity problems akin to those that caused the fall of Bear Stearns Cos.
Lehman shares set an intraday low of $20.25 today, a level not seen since 2000. The stock had closed at $39.26 on Friday, when it lost nearly 15%, and had set a 52-week high of $82.05 on June 20, 2007. Shares closed down 19.13% at $31.75.
In a statement, Lehman said its cash position continues to be very strong, a view supported by several analysts.
Lehman is not Bear, analyst Mike Mayo at Deutsche Bank Securities said in a research note issued today to clients. Mr. Mayo added that Lehman at the end of last year had $98 billion available for liquidity or $70 billion more than needed for $28 billion of unsecured short-term debt.
Mr. Mayo also noted that Lehman has $180 billion in repurchase agreements lines and received a $2 billion credit line from 40 banks.
Credit rating agency Moodys Investors Service also reaffirmed Lehmans investment-grade A-1 rating on the firms senior long-term debt but lowered its outlook to stable from positive, citing strong headwinds facing its core business. Lehman is expected to report its first-quarter earnings Tuesday morning.