Lehman Brothers Holdings Inc. (NYSE: LEH) stock is up over 10% as of 9:44 a.m. on reports that Korea Development Bank (KDB) is "open to" acquiring Lehman, according to Bloomberg News. Can you say short-covering?

Bloomberg reports that KDB said, "We are studying a number of options and are open to all possibilities, which could include (buying) Lehman." But this statement requires some context. Bloomberg reports that The Financial Times wrote yesterday that "Lehman failed to sell a 50 percent stake to [KDB] and China's Citic Securities Co. The buyers walked away after deciding Lehman demanded too high a price."

Meanwhile, this announcement must be scaring those who bet that Lehman would not be able to pay its bondholders. "Credit-default swaps protecting against a default on Lehman's bonds dropped 74 basis points today to 315," according to Bloomberg. Who knows where this latest chapter in the Lehman saga will lead?

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

Will Lehman go Korean? originally appeared on BloggingStocks on Fri, 22 Aug 2008 09:50:00 EST. Please see our terms for use of feeds.