The Crazy Lehman Share Price

Lehman Brothers looks as though it's going to sell its asset management arm, Neuberger Berman, for a sorely-needed $10 billion or so. That's got to be good news for the stock, right? No: Lehman shares are down more than 10% today, and its credit default swaps have gapped out as well.

There's no doubt that if Lehman shares had risen today, everybody would know why. But the fact that they're down puts financial journalists into a quandary: they have to pretend that there's some reason, and the best they can do is "writedown fears".

That said, DealBook has a good post today on why selling Neuberger might be a bad idea for Lehman: it could harm the bank's credit rating, send its compensation ratios soaring, and make future cashflows almost impossible to predict (and therefore to price). "Selling the unit would be tantamount to selling a ship's anchor in the midst of a storm," says the piece, citing no one in particular.

And the "writedown fears" reason isn't as silly as it looks at first glance: Lehman's drop of $1.66 a share today is smaller than the per-share losses that the likes of Kenneth Worthington are now forecasting in the third quarter.

But my feeling is that there isn't a reason -- certainly not a nice clean easy-to-fit-into-a-headline one -- why Lehman's stock is tanking today. Sometimes stocks move and we know why. More often, stocks move and we don't know why, which doesn't stop journalists from guessing. And sometimes stocks move for no particular reason at all -- especially when they're surrounded by uncertainty, they're highly leveraged, and there's a good chance that the CEO will be out within a month.