Lehman stock rallies to week high on premise of elaborate April Fools joke

Lehman stock rallies to week high on premise of elaborate April Fools joke
April 01, 2008: 03:19 PM EST

April 1 NEW YORK (AP) – Lehman Brothers Holdings Inc. (LEH) posted a 16.7% gain in mid-afternoon trading to a week high of 43.93. The entire industry seems to be on a rally, as many other large banks experienced an equally impressive surge. News broke just after market hours on Monday that Lehman, the fourth largest investment bank, would be raising over $3 billion in capital through a preferred stock offering.

Sources unfamiliar with the situation were baffled regarding the sudden surge in the company’s stock. “I don’t get it,” said one investor, “the firm is so fundamentally weak and an equity issuance is an indicator that the stock is currently overvalued; why would the market rally on such poor news?”

Insiders were able to offer a more intimate perspective. Dick Fuld, CEO of Lehman Brothers, has announced that the market gain has been part of an elaborate April Fools Joke, intended to inject some light-hearted humor into the market after a bearish week. “It’s plain as day,” said Fuld, “the details of the joke are all included in fine print at the bottom of our website. We felt that the American public would appreciate some comedic relief after losing the majority of their life savings in the past few days.”

According to the Lehman website, the firm sent an undercover banker to the New York Stock Exchange to “play with a few of the buttons”. The site continues, “after our agent became familiarized with the NYSE equipment, he was able to find the button that makes stocks go up and the other one that makes stocks go down. He pressed the up button a few times and our stock jumped about eight percent. The market bandwagon mentality must’ve accounted for the other eight or so percentage points. When we first implemented this joke, we never expected it to take off the way that is has!”

When asked about the potential consequences from the prank, Fuld said that “people will realize that it’s just a good ole fashioned April Fools joke and likely won’t be too upset”. He further noted, “the only people who might get mad are the ones who are embarrassed for getting tricked; but it’s their fault for being so gullible!”

Lehman has announced that the undercover banker will reset the stock back to its original levels during pre-market hours on Wednesday, April 2. “It’s easy,” said the undercover banker, who had only agreed to speak with us on condition of anonymity, “I’ll just sneak back in and press the down button a few times. I already know which button it is.”