Latest on Lehman

After yesterday's bloodbath, in which the common stock of Lehman Brothers declined in value by 45% in a single day, company executives feverishly accelerated their quarterly report by a week. Originally scheduled for next Wednesday, third-quarter earnings were released this morning instead. The news was worse than expected: a loss of nearly $4 billion and a mark-to-Merrill write-down of twice that on its inventory of mortgage-backed securities.

Lehman announced several steps to repair its balance sheet. It cut its quarterly dividend from 68 cents to a nickel (should have been done a year ago) and disclosed plans to sell a majority stake in its investment-management business (good luck--the Koreans just walked away from a possible deal). There was also talk of spinning off its commercial real-estate portfolio into a separate, publicly traded company, but that's just a shell game, no value added. All this is to "reposition" the firm, according to the CEO, who must not be comfortable with the current position of prostrate and tire-marked.

The hastily arranged conference call was meant to prop up the stock price, which briefly exceeded $9 a share in the pre-market as short sellers cashed in. An hour into the regular trading session, the stock has settled back to 8, down 85% in the past year. If the Mac'n'Mae takeover by the U.S. Treasury earlier this week is any indication, the shares are on their way to zero. Another bad omen: the yield on Lehman's two-year paper is going through the roof. The firm will be unable to roll over its debt as a stand-alone entity.

[update, Sept. 11, 8:15 a.m.--]
LEH is getting crushed in today's pre-market, trading near 5.

[update, 15 minutes later--]
Make that 4. Sounds like a launch-pad countdown!

[update, Sept. 12, 8:15 a.m.--]
Now trading with a 3 handle.

[update, Sept. 15, 7:00 a.m.--]
Now less than a buck, as the company files for Chapter 11 bankruptcy protection.