Lehman Brothers Stock LEHMQ?

Question

I'm new to investing and stocks in general (I'm a student in college), but lately I've been interested in investing as I'm making some extra money and would like to try and do something with it.

I hear the economy isn't doing so great, and recently ran across the fact Lehman Brothers went bankrupt and stock dropped a huge amount (currently under 25 cents from $60-70 I believe). As of September 22, I hear Barclay's has taken ownership of Lehman Brothers.

I started thinking I would buy some stock (not spend a lot, but some) in Lehman Brothers just in case it does make a comeback - it's so cheap it seems like it cannot hurt. Sure - I may be throwing money away, which is why I won't do a lot (it will be the first stock I ever purchased anyways, so I'm not looking for huge investments).

Today I read stockholders are last to get any gains from a company who filed bankruptcy under Chapter 11, and most advice I saw regarding purchasing Lehman Bros stock cheaply advised against it as reorganization of the company could cancel any old shares.

Now that Barclay's has purchased Lehman Bros, is this still something to worry about? Can old shares of LEHMQ become useless, or are they just cheap now and they may/may not grow?

Again, I'm new to stocks so I'm not quite sure what happens when companies are bought out, file bankruptcy, etc. But I am interested in investing, and it seems like this is an interesting time to come into this field - the economy seems pretty volatile and could go either way. Learning about these issues with being bought out and bankruptcy seems pretty important now seeing how many companies are going downhill pretty fast.

Does anyone have any advice on the topic? I would prefer something with a little more explanation than simply 'it's very risky, don't do it' as I would like to know why it is risky (For example, Barclay's bought out Lehman Bros - what does this mean for old Lehman Bros stock?) or else I will never learn.

Answer 1

The stock symbol for Lehman used to be LEH. Now that they are under Chapter 11 bankruptcy their symbol has changed to LEHMQ. It would not be a good idea to buy these shares. They are not going to be able to pay shareholders anything!!! They have so much debt, they can't even cover, let alone paying off shareholders. If they reemerge from bankruptcy the shareholders will still be wiped out (this is what happened when KMART and United Airlines came back out of bankruptcy). If you are going to buy stock, buy stock in a company who is not in bankruptcy or you are just throwing your money away...

Answer 2

Stocks are always gamble, especially at the stage LEHMQ is at. Don't risk want you're not willing to lose. I bought shares of the stock, and if I make a profit great, but I spent what I knew I was willing to lose. I personally don't see a bright future for this depressed stock. However, the stock could go up in the strange event that Lehman Bros recover, but it will be a while before the stock would reach the point it was a year ago. Years. But if you don't gamble you can't win. It's not looking good for the stock, but at this point anything could happen. I personally think Lehaman is looking for a casket for the stock as we speak. I would approach this stock the same way you would a Black Jack table in Vegas. You'd probably do better at the Black Jack table honestly.

Answer 3

Barclay's is not buying out Lehman. They are just buying part of the business they like or want. Seen in that light, some have said the beneficiaries are British banks.

Answer 4

I don't think its bad to do. You should buy the stock and than decide at what price you would sell it if you make money and than DO IT. Sell the stock at price that it gets to. You just do a limit sell.



Why? Because you get tempted to keep the stock and it will drop. So if you make more than 10% I suggest you take your gains.

Answer 5

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