163 Years and 3 Quarters... The Story Of Lehman Brothers

163 Years and 3 Quarters... The Story Of Lehman Brothers

The history of Lehman Brothers parallels the growth of the United States and its energetic drive toward prosperity and international prominence. What would evolve into a global financial entity began as a general store in the American South.

1844:
Henry Lehman, an immigrant from Germany, opened his small shop in the city of Montgomery, Alabama in 1844. Six years later, he was joined by brothers Emanuel and Mayer, and they named the business Lehman Brothers.

1850:
Henry, Emanuel and Mayer Lehman founded the Firm in Montgomery, Alabama.

1887:
The Firm acquires a seat on the New York Stock Exchange

1889:
Lehman Brothers underwrites its first stock offering

1929:
Triggered by the stock market crash of 1929, the Depression placed tremendous pressure on the availability of capital. Lehman Brothers was one of the pioneers of innovative financing techniques such as private placements, arranging loans between blue-chip borrowers and private lenders. These loans offered strict safeguards and solid returns for lenders, while enabling borrowers to raise much-needed capital.
The Lehman Corporation is created, a prominent closed-end investment company

1984:
American Express acquires Lehman Brothers and merges the Firm with Shearson.

1986:
Lehman Brothers acquires a seat on the London Stock Exchange.

1988:
Lehman Brothers acquires a seat on the Tokyo Stock Exchange.

1993:
American Express divested Shearson and the independent Firm once again became known solely as Lehman Brothers.

1994:
The Firm becomes independent through a public stock offering and Lehman Brothers Holding Inc. common stock commences trading on the New York & Pacific stock exchanges.

1998:
Lehman Brothers joins the S&P 500 Index.

1999:
The Firm passes the $1 billion mark in annual net income for the first time.

2007:
Lehman Brothers ranks #1 "Most Admired Securities Firm" by Fortune.

Dec 13, 2007:
Reports fiscal fourth-quarter profit of $870 million and a record full-year earnings of $4.2 billion.

2008: The Turmoil:
Jan. 17: Lehman says it will stop originating mortgages through wholesale channels amid continued weakness in the housing and real estate markets.

April 15: Speaking at the investment bank's annual shareholder meeting, Chairman and Chief Executive Richard Fuld tells investors that the worst of the credit crisis is behind Wall Street, but that the environment "will remain challenging."

May 16: Announces it is cutting 1,400 jobs, or about 5 percent of its work force.

June 9: Estimates it lost about $3 billion for the second quarter and that it is raising $6 billion in fresh capital.

Aug. 29: The New York Times reports Lehman is preparing to cut 1,500 jobs.

Sept. 8-9: Shares of Lehman plunge 52 percent amid worries the investment bank was struggling to find new investors and raise capital. Reports say the talks with KDB have ended.

Sept. 10: Lehman says it lost $3.9 billion during its fiscal third quarter and plans a number of moves to shore up its balance sheet. The announcement, coming a day after Lehman shares lost 45 percent, is an attempt to assuage market worries. Fuld says the firm will consider all "strategic alternatives."

Sept. 11: Lehman shares skid another 42 percent as investors reject the plan, forcing Lehman executives to scour Wall Street for a financial lifeline.

Sept. 12: Late Friday night Wall Street executives and top U.S. financial officials convene at the New York Fed to discuss how resolve Lehman's situation before it shakes investor confidence in the U.S. banking system.

Sept. 13: The group reconvenes at the New York Fed as foreign finance ministers urge a solution before Asian markets open.

Sept 15:
In New York, shortly before 1 a.m., Lehman Brothers Holdings announced it would file for Chapter 11 bankruptcy protection[47] citing bank debt of $613 billion, $155 billion in bond debt, and assets worth $639 billion
Lehman shares tumbled over 90% on September 15, 2008

Courtesy:
Lehman.com
The AP
Wikipedia.org