Lehman Brothers Holdings Inc LEH.N shares sank almost 45 percent on Tuesday on concern that talks about a possible investment from Korea Development Bank had broken down and that the fourth-largest Wall Street investment bank would be unable to raise needed capital.
Shares of the bank are down 88.5 percent from the 52-week high of $67.73 set last November 14, hurt by mounting losses and write-downs amid the worst credit crisis in decades.
Following are five facts about Lehman Brothers' history and present.
- German immigrant Henry Lehman opened a general goods store in Montgomery, Alabama in 1844. His brothers Emanuel and Mayer joined six years later and named the business Lehman Brothers. The Lehmans accepted cotton, the cash crop of the time, from the local farmers as currency, and traded the cotton for cash or merchandise. In that way, they became brokers of the crop.
- The U.S. Civil War interrupted Lehmans' business. After the conflict was over, the brothers moved their operations to New York.
- American Express acquired Lehman Brothers in 1984 and merged the financial institution with its unit Shearson. Nine years later, Shearson was spun off and the independent firm once again became known as Lehman Brothers. In 1994, the investment bank began trading on the New York Stock Exchange.
- After years expanding its payroll, Lehman cut its workforce almost 9 percent in the first six months of 2008 to 26,189 employees. More layoffs were expected, a person familiar with the matter said in August.
- Lehman has more than $60 billion of mortgages and asset-backed securities on its books, an amount well in excess of the company's net worth. The bank has posted losses and write-downs close to $7.0 billion related to the credit crunch.
(Reporting by Juan Lagorio)