Economic Times falls for fake Fuld letter to Buffett

It seems that a journalist at India’s Economic Times is convinced that our “artistic licence” Fuld blog (see prior post “From the desk of Dick Fuld, Lehman Brothers CEO” July 17-08) might have been for real:

NEW DELHI: Failed US investment banker Lehman Brothers, voted the best in the business many times, is rumoured to have made a distress call to Warren Buffet to rescue it, but the legendary investor politely hung up as he did not see good returns. Days before filing for bankruptcy protection from its creditors to whom it owes over $600 billion, Lehman Brothers wrote to Buffett for help, according to a mail currently doing the rounds on the internet through blogs and forwarded e-mails….

The viral world at work. The truth is, the Lehman outcome is terribly sad for many thousands of hard working employees. And while Mr. Buffett didn’t invest, whether or not Mr. Fuld tried, it seems to me that Lehman’s Board missed several opportunities over the past six months to get ahead of the challenges that threatened the firm.

According to the WSJ, South Korean banks were prepared to buy 25% of Lehman at US$26 last month, but Mr. Fuld thought the price was too low. At US$4 a share, a few weeks later, Mr. Fuld realized he had to sell, but there were no takers at that point.

A stark reminder for all CEOs. When you need capital, the quote is the quote; and it isn’t going higher. As Harold would always say, and was quoted here last January: “when they pass around the cookie tray, take one” (see prior post “Just sit tight – unless you’ve got the chance to raise capital” January 22-08).

MRM