Einhorn Insists Lehman Needs More New Capital

May 29 2008 | 2:00am ET

Hedge fund manager David Einhorn took his “campaign” against Lehman Brothers to the airwaves yesterday, arguing that the Wall Street giant needs even more new capital.

Einhorn, whose Greenlight Capital is shorting Lehman stock, warned that “we are nowhere near the end” of Lehman’s writedowns and losses.

“Lehman is undercapitalized,” he said on Bloomberg Television. “They continued doubling down as the credit crisis evolved.”

“It’s essential, from a public interest, that these investment banks de-lever in a very material way,” Einhorn added. “That will require raising significant amounts of capital.”

Einhorn has berated Lehman of late, accusing the firm of hiding $6.5 billion in collateralized debt obligations and insisting that the bank remains in trouble. For its part, Lehman dismisses Einhorn’s comments as self-interested and baseless.

“Mr. Einhorn cherry-picks certain specific items from our 10-Q and takes them out of context and distorts them to relay a false impression of the firm’s financial condition, which suits him because of his short position in our stock,” Lehman said. “He also makes allegations that have no basis in fact with the same hope of achieving personal gain.”


In Depth

Q&A: Decathlon Capital On Revenue-Based Alternative Lending

Oct 30 2017 | 3:49pm ET

The explosion in private credit activity since the end of the financial crisis is...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

CAIS: How Technology is Disrupting the Alternative Investment Industry

Nov 7 2017 | 5:35pm ET

If there’s one thing that alternative investment professionals can agree on, it...