Lehman Brothers Bankruptcy
unknown
9/15/2008
unknown

  • Confidence in the stock began to erode before it went bankrupt
  • On Sep 9 2008 the stock lost about 1/2 its value (dragging down US markets)
  • On Sep 10 2008 it announced a $3.9 Billion loss & decision to sell its investment management business (stock dropped again)
  • Went bankrupt on Sep 15, 2008 after talks to sell the business fell though
  • Bankruptcy was surprising - the company had weathered other difficult times like the Great Depression and WWII
  • Bankruptcy was one trigger of the broader recession and stock market collapse (confidence eroded)
    • Caused panic to spread


Lehman Bankruptcy Causes

  • Exposure to subprime lending
  • Use of Too much leverages