Lehman Brothers Stock: From an $86 Record to a Cancelled Share

Lehman Brothers share price history: the milestones

This table uses nominal prices from company filings and contemporary news reports, not a chart. Our game's own Lehman series is a smoothed reconstruction built for the game, so it is not shown here and its values are not quoted. For a broader view of the crash, see our 2008 financial crisis timeline.

Two things stand out. First, the stock had lost more than half its value long before the final crisis: on March 17, 2008 it closed at $31.75, 63% below the record. Second, the final collapse took four trading days. The stock closed at $14.15 on Monday, September 8, and at $3.65 that Friday.

30-to-1 leverage and the Repo 105 trick

At the end of fiscal 2007 (November 30, 2007), Lehman reported $691 billion of total assets against $22.5 billion of stockholders' equity. Its own 10-K put the leverage ratio at 30.7x, up from 26.2x a year earlier and 23.7x in 2003. In plain terms, equity was about 3.3% of the balance sheet. A 3.3% fall in the value of Lehman's assets would, on paper, wipe out its shareholders.

Lehman preferred to point investors to a different number, "net leverage", which it called the more meaningful measure. That figure was 16.1x at the end of 2007 and fell to 12.1x by May 2008, which looked like de-risking. The bankruptcy examiner, Anton Valukas, later found that part of the improvement came from an accounting device called Repo 105.

A normal repo is a short-term loan backed by securities. Lehman structured some of these deals so they could be booked as sales just before each quarter closed, then bought the securities back days later. According to the examiner's report, the firm moved $38.6 billion off its balance sheet this way at the end of 2007, $49.1 billion at the end of February 2008 and $50.38 billion at the end of May 2008. Without them, net leverage would have been 17.8x, 17.3x and 13.9x instead of the reported 16.1x, 15.4x and 12.1x. Valukas told Congress that internal emails described the practice as a "gimmick" and that the shift of nearly two points was large next to Lehman's own materiality line of one tenth of a point.

What happened to Lehman Brothers stock in 2008

March. Over the weekend of March 15-16, JPMorgan agreed to buy Bear Stearns with Federal Reserve support. On Monday, March 17, Lehman was seen as the next weakest broker: its shares fell $7.51, or 19%, to $31.75. The same day JPMorgan rose 10.3%.

June. On June 9 Lehman announced an expected second-quarter loss of about $2.8 billion, or $5.14 a share, its first quarterly loss since it went public in 1994. Net revenue for the quarter was negative $0.7 billion. It also said it would raise $6 billion in new capital. The stock, which had closed at $32.29 the previous Friday, fell about 12% in premarket trading. In the same announcement, the firm put its liquidity pool at an estimated $45 billion, which Valukas later noted it presented as its "largest ever".

Summer. Through the summer Lehman held talks with the state-owned Korea Development Bank about a large equity investment. They never produced a deal. On Tuesday, September 9, reports that they had stalled sent the stock down $6.36, or 45%, to $7.79, its lowest level since the 1998 financial crisis. A year earlier it had traded at $67.72. The S&P 500 fell 3.4% that day, from 1,267.79 to 1,224.51.

September 10-12. Lehman pulled its third-quarter numbers forward and announced an estimated $3.9 billion loss, with $7.8 billion of gross write-downs, and a plan to sell a majority stake in its investment management division. It estimated its liquidity pool at $42 billion. The examiner later found an internal Lehman document showing that the assets it rated easiest to turn into cash shrank from $24.7 billion on September 9 to $1.4 billion by September 12. The stock fell about 7% on Wednesday, 42% on Thursday and 13.5% on Friday, to $3.65.

The last weekend: Barclays, Bank of America and no public money

Early on Friday evening, September 12, Treasury Secretary Henry Paulson gathered the heads of the big Wall Street firms at the New York Fed. According to the Financial Crisis Inquiry Commission, he told them that a private-sector solution was the only way to prevent a Lehman bankruptcy. The New York Fed's general counsel, Tom Baxter, later summed up the government's stance on assistance as "not a penny".

Two possible buyers had been looking at the firm. Bank of America had reviewed Lehman's books, concluded its assets were overvalued and told Paulson there would be no deal without government support. By Sunday it had agreed instead to buy Merrill Lynch for about $50 billion in stock. Barclays came closer: by Saturday night a deal appeared to be in place, with a group of banks financing the assets Barclays did not want. On Sunday it fell apart. The New York Fed wanted Barclays to guarantee Lehman's obligations until closing, UK rules required a Barclays shareholder vote for that, and the UK Financial Services Authority would not waive it.

With no buyer and no lender of last resort willing to step in, Lehman Brothers Holdings filed for Chapter 11 in the Southern District of New York shortly after midnight on Monday, September 15 (case 08-13555). Its UK units went into administration the same day.

Why it was the largest bankruptcy in US history

The figure reported at the filing was $639 billion in assets against about $619 billion of debt. The $639 billion is the total from Lehman's last quarterly report filed with the SEC, at May 31, 2008; a preliminary estimate released on September 10 put total assets at about $600 billion at the end of August. Before Lehman, the two largest US bankruptcies were those of WorldCom in 2002 and Enron in 2001, and the FCIC described Lehman's case as the largest bankruptcy in American history.

The size came from the business model. Most of those assets were trading positions, repo loans and derivatives financed day to day by other institutions. When counterparties stopped rolling that funding over, as JPMorgan did by demanding more collateral in the final week, the firm could not keep operating, whatever its assets might have been worth in a calmer market.

How Lehman's peers traded through 2008

From February 1, 2007 to Lehman's last close on September 12, 2008, the S&P 500 price index fell 13.4% (10.5% with dividends reinvested). In our total-return data, the financial-sector ETF XLF lost 40.8%, Citigroup 64.6%, Bank of America 29.1% and JPMorgan 15.4%. Lehman lost 95.8% from its high over roughly the same stretch. It was the outlier, but the whole sector was already deep in a bear market.

On September 15 itself, the S&P 500 fell 4.7% to 1,192.70. Bank of America dropped 21.3% on the day it agreed to buy Merrill, Citigroup 15.1%, JPMorgan 10.1% and XLF 9.7%. The worst was still ahead: by November 20-21 the S&P 500 price index was 48% below its February 1, 2007 level, and in our total-return data Citigroup was down 92% and Bank of America 76%. The lost decade article covers how long those losses took to recover.

What shareholders and creditors got afterwards

The business was broken up within days. Barclays agreed on September 17 to buy Lehman's North American investment banking and trading operations, taking about 10,000 employees. The bankruptcy court approved the sale within days, and it closed on September 22: $250 million in cash plus assumed liabilities for the business, and $1.29 billion for the Seventh Avenue headquarters and two data centers. Nomura agreed on September 22 to buy the Asia-Pacific franchise, with about 3,000 staff, and on September 23 the European and Middle Eastern equities and investment banking businesses, with about 2,500.

• Shareholders: nothing. When the Chapter 11 plan took effect on March 6, 2012, all existing common and preferred shares were cancelled. One new share went to a plan trust held for former stockholders, and that trust gets value only if creditors are paid in full, which they have not been.
• Senior bondholders of the parent: after the 32nd distribution on April 2, 2026, they had received 46.82% of their allowed claims. The debtors' August 2025 report put the estimated end-of-case recovery at about 46.9%.
• All parent-company creditors: $129.4 billion distributed through April 2025, of which $96.4 billion went to third-party creditors (the rest moved between Lehman entities).
• Customers of the US broker-dealer (Lehman Brothers Inc.): the SIPC liquidation closed in September 2022 after returning $106 billion to customers, covering all 111,000 claims in full. Its general unsecured creditors recovered 41.28%.

The gap is the point of a capital structure. Bondholders who bought at par lost a little over half; shareholders who bought anywhere above zero lost everything, including those who bought the 45% drop on September 9 or the 94% drop on September 15.

Why LEHMQ quotes still show up

After the NYSE removed the shares from listing in the fall of 2008, they traded over the counter under the ticker LEHMQ, where the Q marks a company in bankruptcy. Some financial data sites still keep pages for the old tickers with their last recorded trades, so a search can return a price. That price is a leftover, not a market: the shares were cancelled on March 6, 2012, Lehman filed that same day to end their SEC registration, and the filing listed one holder of record for the common stock. That holder is the plan trust, which received the single new share. Separately, the bankruptcy estate is still paying creditors, which keeps "Lehman Brothers" in current SEC filings and news.

Lehman Brothers in Blindfolio

Blindfolio is a free browser game that drops you into a 10-, 15- or 20-year stretch of real market history. Lehman Brothers is one of the bankrupt and delisted companies in its catalog, shown under a temporary codename like every other stock, so you cannot tell which bank you are looking at. If you pick the 2000s as your start decade, the round can include Lehman, and you only see what an investor of the time could see: news headlines (inflation figures and rate decisions included), the Fed funds rate shown on the bank deposit, and the price chart. With a chosen decade the year is shown on screen; in a random round it stays hidden too. Company names are revealed at the end, alongside your result against the S&P 500. It is the same problem described in our piece on survivorship bias: the companies that disappeared are easy to forget when you study the market with hindsight.