Shares of Lehman fall amid hedging concerns

Lehman's shares fell $2.44, or 5.8 percent, to $39.56. Shares have traded between $20.25 and $82.05 during the past year.

"The company's hedges which worked so well to blunt the impact of markdowns in the first fiscal quarter may not be working so well now," Ladenburg Thalmann analyst Richard Bove wrote in a research note. "Plus, Lehman has begun the process of laying off personnel."

If hedging strategies failed in the past three months, Lehman could post a quarterly loss when it reports fiscal second-quarter results, Bove said. Lehman's fiscal second quarter ends May 31.

The amount of money Lehman must pay out in severance as it slashes jobs is also unclear, Bove said. The size of the cuts and severance is likely to hurt financial results during the current quarter, he added.

Bove cut his price target to $38 from $48 and his fiscal 2008 earnings estimate to $2.36 per share from $3.87 per share. Lehman's fiscal year ends Nov. 30.