Lehman Brothers Holdings Inc said it would fire 1,200 workers and take $52 million of charges as it shutters its subprime lender BNC Mortgage Corp, Reuters reports.
The company’s shares rose after the announcement, but have fallen more than 25 percent since mid-June, more than the 15 percent drop in the broader brokerage sector index.
“People perceive this as mitigating some of Lehman’s risk from mortgages. The stock was taken out and shot in recent weeks,” says Chuck Carnevale, chief investment officer at Great Companies, which is thinking about buying Lehman shares.
Lehman attributed its closing BNC to “market conditions” that required a substantial reduction in its resources and capacity in the subprime space.