NEW YORK, September 11 – Lehman Brothers shares plunged anew Thursday as fears intensified about the survival of the troubled Wall Street investment giant.,
In opening trades, Lehman shares slid 40 percent to 4.33 dollars, extending a rout in recent weeks that has erased more than 90 percent of the firm\’s value.
"There haven\’t been any new developments on Lehman other than a handful of analyst downgrades, although the downgrades didn\’t really raise any new issues," said analysts at Briefing.com.
"The stock\’s plunge stems primarily from market sentiment and diminishing confidence."
Some said the downward spiral raised the prospect of a collapse in the manner of Wall Street rival Bear Stearns earlier this year.
"Finance is a confidence game. Once it\’s gone, the critical function of being able to trade with other financial entities becomes difficult and expensive," said Andrew Busch, analyst at BMO Capital Markets.
"Lehman\’s survival as an independent firm looks increasingly in doubt, yet the shape of an end game is not yet clear," said Yves Smith, a financial analyst at the website Naked Capitalism.
The 158-year-old Wall Street firm announced plans Wednesday to sell off key assets to shore up its finances as it posted more hefty losses linked to the US subprime real estate crisis.
The beleaguered Wall Street firm, seen as in desperate need for a capital injection, lost an estimated 3.9 billion dollars in its fiscal third quarter amid fresh writedowns on mortgage assets.
The results, published a week ahead of schedule in view of a near-meltdown in Lehman shares, also noted plans to sharply reduce its exposure to the real estate sector and other steps to raise cash.
Meanwhile other financial secotr firms also saw steep declines. Washington Mutual, a major bank, slid 22 percent to 1.81 dollars and Merrill Lynch fell 12 percent to 20.47 dollars.