Lehman Brothers
In July 2007, Einhorn shorted Lehman Brothers stock, believing that Lehman had massive exposures to illiquid real estate investments that were improperly accounted for. He also claimed that they used dubious accounting practices in their financial filings. Einhorn shared his thesis on Lehman in November 2007 at the Value Investing Congress.
When Bear Stearns had to be bailed out by the Federal Reserve in March 2008, Lehman was widely considered to be in a weak financial situation. In a speech at a conference in April, Einhorn announced his Lehman short position. In May, Lehman's CFO Erin Callan held a private teleconference with Einhorn and his staff, who hoped Callan could explain discrepancies they had uncovered since the firm's latest financial filing. Einhorn publicly characterized Callan's responses on the call in a negative light and Lehman stock fell sharply. Callan was fired a few weeks later when Lehman reported a $2.8 billion quarterly loss. Lehman soon declared bankruptcy in September 2008.
Read more about this topic: David Einhorn (hedge Fund Manager)
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—Ernest Lehman (b.1920)
“A village seems thus, where its able-bodied men are all plowing the ocean together, as a common field. In North Truro the women and girls may sit at their doors, and see where their husbands and brothers are harvesting their mackerel fifteen or twenty miles off, on the sea, with hundreds of white harvest wagons, just as in the country the farmers’ wives sometimes see their husbands working in a distant hillside field. But the sound of no dinner-horn can reach the fisher’s ear.”
—Henry David Thoreau (1817–1862)