Replies to post #1730 on Lehman Brothers Holdings Inc. (fka LEHMQ)

[bman]

Where do you get this? This is totally incorrect.

[east600]

LEHMQ going to be around for quite some time - it will take them a few years to clear the decks.

[JJSeabrook]

As a general rule, I agree. It's not something written in stone, and there ARE a small percentage, a very small percentage, of companies that emerge from Chapter 11 with the common shareholders retaining shares, even if not all of them. Even if parts of the company get bought, old, common shareholders are baggage nobody wants to take on, and they "usually" don't. The more of the company that gets sold off by the piece, the less value the common shareholders have, IMHO. As the assets dwindle, the shareholders become a greater liability in whatever remains when it's all said and done. Just my guess, as everyone will have to guess until they submit a plan for emergence from Chapter 11. Once that comes out, it'll state what will happen to the common shareholders, as well as the preferred shareholders (which usually retain their shares).

Lehman just filed bankruptcy, so I don't see them emerging from it any time soon. Once they file their initial plan for emergence from BK the picture will be clearer for the common shares. In the interim, this is a fantastic play to flip, and I think it will remain so for quite some time into the future. The end of this quarter could get rough and the end of the year could hit it again, but up to the end of the quarter and between the end of this quarter to the end of the year should provide some excellent trading opportunities.

Some folks will view this as the investment of a lifetime, and maybe it is. I don't see it that way, but DO see it as a stock that may be one of the best flippers in a lifetime, provided the volume keeps coming in as it has been, and should for quite some time. Who really played this the best, most profitable, way won't be known for quite a while. All anyone can do is trade it the way they think is best. Hopefully they play it the way that's most profitable for the way they trade. Best of luck to all!

JJ

Posted by: biznipianjr Date: Friday, September 19, 2008 8:27:50 PM
In reply to: Ohmymookies who wrote msg# 1726 Post # of 1733
in the case of ch 11 the shareholders are wiped out at some point in the process. the bondholders and some secured creditors get some sort of settlement. if you can trade this for a profit in the short term you will be fine. if you own the common stock at some point it is totally without value and you will get nothing. maybe ten or twenty weeks are left for it to trade. once the final settelment is made it is worthless paper. im sorry fellas no comman shareholder gets out alive. its just the way it is.

[@-@]

Although I don't disagree that the common shares (LEHMQ) may become worthless in bankruptcy, it's not always the case. In some Chapter 11 proceedings, the common shareholders receive a cash payment (Coleco, for example, paid about 20c a share back in the day), new shares (usually amounting to a small percentage of the float as the unsecured and note creditors get the majority), or are left in tact (very rare, usually this happens when the company does not issue new shares after the bankruptcy and is just an empty shell, then they can sell it as a clean shell with shareholders).

However, the point that's most important is that buyers of the common are basically doing a long shot, 250:1 bet. I don't see why someone would pay 10c for a common share when they can get a preferred K, L, M, or N for the same price. The M shares, because nobody knows the symbol (LHHMQ) went for 1-3 cents today. Each K, L, M, and N gives you a claim of $25 plus interest ranked above the common and regular preferred shares. You're still subordinate to senior creditors though.