Lehman stock slide: Analysts, investors weigh in

NEW YORK (Reuters) - Lehman Brothers Holdings Inc shares tumbled further early on Thursday, the day after the investment bank unveiled plans to sell a majority of its investment management unit and spin off most of its commercial real estate loans.

The following is reaction from analysts and investors:

ROBERT ALBERTSON, CHIEF STRATEGIST OF SANDLER O'NEILL IN

NEW YORK:

"The difference between Lehman and Bear is clearly in the balance sheet structure, which made one more vulnerable than the other. In the case of Lehman, they have liquidity and their funding is rock-solid.

"I have not seen any other (markdown) numbers as low as Lehman's," referring to plans Lehman announced on Wednesday to sell its real estate assets.

"We don't know what's on Lehman's balance sheet. All we do know is that there is a tremendous amount of money on the sidelines that wants to invest in distressed assets. They just have to be willing to sell, to swallow lower prices.

"Everyone is overshooting here. I'd argue the liquidity of the firm should be more than adequate."

MICHAEL HOLLAND, FOUNDER OF AND PORTFOLIO MANAGER FOR

HOLLAND & CO IN NEW YORK:

"When confidence starts eroding, you have a self-fulfilling story. It's unfortunate that we're in the kind of position now where events can take over. The stock is telling us that (Lehman Brothers CEO) Dick Fuld is running out of options. Unfortunately for Fuld, who has been very adamant about keeping Lehman independent, he has to find a partner now, someone to acquire them.

"Historically, Fuld has been someone you don't bet against when times (are) tough. This time, things may be too tough.

"The stock price is saying that."

ROBERT LUTTS, CHIEF INVESTMENT OFFICER OF CABOT MONEY

MANAGEMENT IN SALEM, MASS.

"Obviously there's going to be some very fast trading and some rumors.

"The big thing is that every day that goes by from the word that the Korean bank walked away from negotiation raises the question: Who else is looking at it and not interested?

"It's a waiting game: The longer that time goes on, the less confidence that there will be that white knight that's needed.

"I believe it will happen, there will be white knight, but buyers today are getting savvy. They want a better price. They know that if they play coy, wait, things get better for the buying side."

Referring to the Fed window availability:

"The issue here is confidence. When liabilities exceed assets, confidence wanes, regardless of the ability to get capital on a temporary basis.

"This is a bigger issue, and I would anticipate that we will have some significant news in the next two or three days."

WILLIAM SMITH, PRESIDENT OF SMITH ASSET MANAGEMENT INC IN

NEW YORK:

"They laid out a plan, but didn't do anything, and people want something done.

"What you have is a loss of confidence in management, and they've got to start doing things instead of saying they're going to do things.

"I'm in shock as to how Fuld let this get away from him. From what I understand, the guy was a great executive for three decades.

"Wall Street is nuts -- you've got this whole cadre of short sellers that are pushing the stock down, you've got the buy side that won't touch it, and the sell side, where it is in vogue to be negative.

"People are starting to apply the price of the equity to the underlying value of the company, and it's just not the case. Lehman can trade at $2 forever and still be in business."

ROSE GRANT, MANAGING DIRECTOR OF EASTERN INVESTMENT

ADVISORS IN BOSTON:

"As much they try to calm people down or calm investors down, investors don't have yet the answers they need. It's definitely a crisis of confidence right now. Earnings numbers were worse than expected, and there's the concern that there are more losses coming down on the road. There's a complete lack of faith, lack of confidence, and lack of trust."

ARTHUR HOGAN, CHIEF MARKET ANALYST AT JEFFERIES & CO IN

BOSTON:

"We thought getting news out of Lehman was going to clear the dark cloud, but it really doesn't. It just leaves us with a company that's limping along, that may or may not make it."

(Reporting by Elinor Comlay, Jonathan Spicer and Ellis Mnyandu; Editing by Christopher Kaufman and Lisa Von Ahn)