Lehman Seeking a Buyer, as Shares Spiral

Updated from 2:05 p.m. EDT

Lehman Brothers (LEH Quote) shares were mired deep in the red again Thursday, as reports said the reeling investment bank is now seeking a buyer for the entire firm.

Lehman Brothers CEO Richard Fuld is actively shopping the entire firm after the market's sour response to a capital preservation plan, CNBC reported, citing sources close to the firm.

The Wall Street Journal then said Bank of America (BAC Quote) could be one of the potential buyers, citing people with knowledge of the matter.

Lehman, after several days of losses, said Wednesday that it would sell a majority stake in its asset-management business, spin off its commercial real-estate assets into a new publicly traded company and cut its annual dividend to 5 cents a share from 68 cents.

Goldman Sachs, Oppenheimer & Co., Banc of America Securities and Citigroup all downgraded the stock Thursday morning, sending shares spiraling downward 41% to $4.25.

"Management did not successfully put to rest the issues that had been pressuring the stock," Goldman analyst William Tanona wrote.

Lehman shares were recently down 37.7% to $4.52 on the New York Stock Exchange, signaling it was well on its way to a fourth straight day of losses. The stock closed trading at $16.20 on Sept. 5, and the shares are off 90% from their 52-week high.

Cramer: Lehman's Not Done Falling

Fears that Lehman could suffer the fate of Bear Stearns -- which federal officials forced to sell itself at a cut rate $10 per share to JPMorgan Chase (JPM Quote) in March -- have been behind the selloff. Like Bear, Lehman's fortunes are strongly connected to the real estate and fixed-income markets, which has been at the center of the current economic crisis.