Do you want to buy Lehman Brothers?

Posted by wpcomimportuser1 Thursday, September 11, 2008 at 4:37 pm

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Bess Levin at Dealbreaker suggests we all get together and buy Lehman Brothers for Maria Bartiromo, because it's her birthday.

Barry Ritholtz has a screengrab of the Craigslist ad offering "Free! Bulge Bracket Investment Bank (Midtown West)." Sadly, the original has been flagged for removal.

And from the wires you can get all the far less interesting rumors about potential suitors (or not) like Bank of America, Goldman Sachs, Nomura, HSBC, Barclays, etc.

Lehman's market cap, as of today's close, was $2.9 billion. You could sell the headquarters building for about $1.3 billion, which leaves $1.6 billion for all the rest of the business. That's still slightly out of my price range, but it strikes me as a reasonably good deal for a company that, even after you subtract the $6.6 billion in losses over the past two quarters, made an average profit of $1.8 billion a year for the past five years.

So why hasn't anybody bought it yet?

1) They're worried about much bigger losses looming in Lehman's balance sheet.

2) They're just not in a buying mood. In fact, they're in a crawl-under-their-desks-and-wait-until-all-this-over mood.

3) They have no idea what an investment bank with no consumer franchise is worth anymore. (It's not like there's a large comparison group.)

4) They're playing chicken with the Fed, hoping they can arrange a backstop like the one JP Morgan Chase got when it bought Bear Stearns. (A backstop the Fed really doesn't want to extend.)

5) They've heard Maria Bartiromo already has an investment bank. (Which she doesn't, by the way. Her husband runs a family of exchange-traded funds, but that's really not the same.)

Am I missing anything?