Because in August today was not even on the radar screen..the company was booking losses but, still liquid and had access to the discount window to make ends meet. This started Wednesday morning when LEH posted earnings and it's plans to reorganize and the market didn't like it. Shortly thereafter, LEH had little to no equity to back up it's paper being shuffled and traded from firm to firm....the book on this stock was 26 last week after posted earnings..MER's was 29 with almost identical balance sheets..what's the difference between MER and LEH? LEH got hit before MER did..although, it was in good faith, it was a mistake for Fuld to preannounce earnings. It forced LEH into a corner to make an impossible deal in an extraordinarily short time with no position of strength to bargain from. But, hindsight is 20/20. IMO had MER's stock gotten hit like LEH's did first...and it was coming, that was the next target..it would have been LEH being bought and MER posting chapter 11. This was all about timing IMO. No more, no less. On the positive, but, probably a pipedream at this point Chapter 11 allows the company to continue to function and allows the remote possibility that it may emerge from bankruptcy. Also, I'm sure there is somebody with deep pockets somewhere that wants to pick up the scraps on the cheap. 2 bucks a share probably doesn't sound so bad to Fuld and LEH right now.
-Dave-
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