This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Like Lehman Brothers, Show Grit Under Fire

Another day, another investment bank in trouble.

Recently, there has been a lot of chatter about Lehman Brothers (LEH), whose stock plunged amid rumors of major trouble at the investment bank.

While your company may never be the focus of heated commentary on CNBC and the financial blogs (insert sigh of gratitude here), Lehman's troubles offer a lesson to any business facing tough times.

When you're under attack, fight back by taking swift, decisive action. Staying vague and downplaying rumors of weakness will only bring on more scrutiny.

In the case of Lehman Brothers, the trouble began as yet more fallout from the subprime mortgage mess that has ensnared countless other banks. With Lehman's announcement that it needed to raise $6 billion in new capital earlier this month, along with its quarterly loss, analysts have been wondering if it's just the tip of the iceberg.

Almost immediately, comparisons were made to Bear Stearns, which collapsed seemingly overnight back in March.

Lehman may yet go out of business or put itself up for sale. But so far, it's weathering the crisis better than Bear did. How? By targeting specific problems and tackling them openly.

"They've taken aggressive steps to stabilize their balance sheet," says Ladenburg Thalmann analyst Richard Bove. "The measures taken were significant enough for the company to withstand whatever the stock market throws at it."

There's no question that Lehman Brothers made mistakes that landed it in its current tight spot; most of the quarterly losses were related to residential mortgages that went bad. But it also made some smart moves that may have saved the company, including liquefying assets, reducing the balance sheet and bringing in more equity.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,960.44 +48.33 0.29%
S&P 500 1,974.67 +4.72 0.24%
NASDAQ 4,468.1550 +25.4570 0.57%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs