- Piecing together the Lehman puzzle. Shares of Lehman (LEH) plunged 45% Tuesday after reports Korea Development Bank was not pursuing a stake in the troubled broker - which it later denied. After the close, Lehman pushed forward its Q3 earnings report (.pdf) by one week, to this morning, saying it would also discuss 'key strategic alternatives.' Overnight, conflicting media reports say 1) KDB has ended talks with LEH, 2) KDB is seeking to take a controlling stake in LEH (more than the 25% mentioned in previous reports) for about $6B, 3) LEH is in talks with BlackRock (BLK) to sell a package of residential real-estate assets, 4) LEH continues to talk with KKR and Carlyle about a possible purchase of its asset-management unit, 5) LEH will spin off some of its commercial real estate assets into a separate company, internally known as SpinCo, and 6) Nomura, Japan's biggest I-bank, may bid for a piece of the pie. At 6:50 AM, shares are up 27% to $9.90. Stay tuned.
- When it rains... Ratings agencies also played a part in Lehman's (LEH) Tuesday tumble. S&P placed Lehman on CreditWatch with negative implications, citing "heightened uncertainty about Lehman's ability to raise additional capital, based on the precipitous decline in its share price in recent days..." Fitch Ratings put Lehman on rating watch negative over difficulties in raising capital: "In the likely event that additional capital is required - due to more write-downs, valuation adjustments and/or trading losses - the cost could be prohibitively expensive given investors' decreasing appetite for financial institutions exposure."
- FedEx sees strong Q1, difficult year. FedEx (FDX) jumped 4.8% in extended trading after it bumped its FQ1 EPS guidance to $1.23 (vs. $0.95 consensus). However, FedEx did not change its full-year outlook: "While sustained declines in fuel prices could improve our full-year outlook, the slowing economic growth trends in the U.S. are now extending to other areas of the global economy," CEO Alan Graf said.
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