Today the Wall Street Journal reported that Bank of America is in talks with Lehman Brothers about buying the Investment Bank.
Is the equity going to "Taken Over" for a Higher price than the $4 dollar stock?
Is the common stock going to be "Taken Under" to virtually zero to do the deal?
The Market is waiting to see how the people in the know are valuing the equity portion and stock capitalization of the largest broker dealers. High leverage, and illiquid money losing mortgage backed securities could actually deplete all of the firms equity, driving the value of the common stock to zero.
The terms of this deal will shine light on the portfolio's current pricing. The market is looking to Lehman Brothers to gauge demand for these hard to value, and even harder to liquidate mortgage backed securities.
It should be a Fun weekend for all involved. The Deadline is Monday September 15th 2008 before Asia opens.
It seems Some type of deal will be done to ensure the markets remain orderly no matter how ugly it is for Lehman Brothers common stock holders.
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