Is Lehman Hiring, Firing, or Surviving? Ask The Tooth Fairy.

The news with Lehman Brothers just keeps coming. In a yesterday's post I highlighted some recent articles that discussed the value of Lehman Brothers Headquarters (article), potential private equity investment and/or purchase of Neuberger Berman (article), and plans for Lehman to cut 1,500 jobs (article). Now it appear that even as plans for reducing the work force are being put into place, Lehman Brothers is looking to hire at various B-schools (see DealBreaker article). While the move is not unprecedented (companies often hire cheap college grads to replace expensive long-timers), the timing and focus are interesting. Not only does news of the job ads come less than a week after the news of lay-offs (granted, it may have been in the works for a long-time), but Lehman is apparently looking for an "Investment Banking Full Time Associate." Of interest in the job description is the following:

"The division provides comprehensive financial advisory and capital raising services. This includes advice relating to mergers and acquisitions, privatizations, and debt and equity financings and restructuring."

No doubt that capital raising and private equity experience would certainly be useful at Lehman right now. Then again, a potential drawback is that "the program begins with four weeks of training in New York." The company could look very different in one month. As mentioned in the DealBreaker article, new hires better "act now, before they go under." Yes, I know. This is too easy to make fun of, and real people are losing real jobs. Nonetheless, given Lehman's recent moves, in particular its desire to have both a quick and sensible sale of their mortgage-related assets, at some point reality will need to step in. To see just how silly things have gotten, check out a recent Here In The City News article regarding a funny spoof email making the rounds on Wall Street. Who ever thought Lehman Brothers, the Tooth Fairy, and Tinkerbell would be in the same article. As with most good humor, there is often a little bit of truth hidden in the satire.

Of course, all of this has the contrarian in me wanting to poke around a little in the stock. I mean, how much worse can it get? Bear Stearns II cannot happen again, can it? Recent valuations certainly seem to be pricing the possibility. The moves have also been extreme enough that the technicals don't provide much help. Some support exists around $13.50, and even near the current price around $16, but both are weak. Downward trend line resistance is near $20. Investors could wait until this trend is broken, but one would have to give up four points and over 25 percent while waiting for confirmation. Traders, acting a little quicker could capture the moves, but as we saw with Bear Stearns, even nimble traders sometimes don't have enough time to act. In the mean time I will probably just sit on the sidelines and enjoy the show. There are just too many other stocks with better risk-reward ratios for investing and trading, even if they are not quite as entertaining.