Lehman Brothers - PH - The reasons of Lehman Brothers' bankruptcy
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Description of the firm

An investment bank is a financial institution that assists corporations and governments in raising capital by underwriting and acting as the agent in the issuance of securities. An investment bank also assists companies involved in mergers and acquisitions, divestitures, etc. Further to provide ancillary services such as market making and the trading of derivatives, fixed income instruments, foreign exchange, commodity, and equity securities.
Unlike commercial banks and retail banks, investment banks do not take deposits.
Equity=stock
Private equity is money invested in companies that are not publicly traded on a stock exchange or invested as part of buyouts of publicly traded companies in order to make them private companies.
Among the most common investment strategies in private equity include leveraged buyouts (LBO), venture capital, growth capital, distressed investments and mezzanine capital. Many times investments are short in nature.

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The Bankruptcy step by step

* In August 2007
Because of the subprime crisis, Lehman Brothers closed its subprime lender: BNC Mortgage which was representing 1 200 positions in 23 countries.

* In the first semester of 2008
Lehman Brothers’ stocks value decreased by 73%.
They reported losses of $2,8 billion and was forced to sell $6 billion in assets.

* In august 2008
Lehman had to release 6% of its work force, which represents 1,500 people.

* August 22,2008
There was a rumor that Korea Development Bank would consider buying Lehman Brothers. Thanks to this rumor, the shares increase by 5% that day.

* Late August 2008
Korea Development Bank couldn’t buy Lehman Brothers because it already has too much difficulties.

* September 9, 2008
Lehman’s shares decreased of 45% to $ 7,79.
The same