Lehman: The Eisinger Effect

If you look at the one-day chart of Lehman’s stock price today, you’ll see that it was up a coupla bucks, happily crusing along, until early afternoon. Then, suddenly, in the last two hours of trading, Lehman’s stock skyrocketed in high volume, ending up more than 15% on the day, to a very healthy (by current standards) 1.23 times book value. What happened in mid-afternoon to boost the stock so much? Well, Jesse Eisinger published a very skeptical article about Lehman’s balance sheet, in the wake of similar questions from Andrew Clavell about HBOS. Maybe Jesse is a contrarian indicator!