TIME FOR SHORTS - LEHMAN'S $2.8B LOSS HINTS AT MORE TROUBLE AHEAD

...based on the reaction of investors and Lehman's harshest critics, the announcements - made a week before the bank was scheduled to release second-quarter earnings - didn't seem to have the desired effect.

"Lehman is raising $6 billion that they said they didn't need to replace losses that they said they didn't have," said short-selling hedge fund manager David Einhorn at Greenlight Capital.

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Lehman's woes equate to a loss of $5.14 a share - well beyond the worst-case scenario loss of $1.28 a share that analysts expected. The news weighed heavily on the 158-year-old investment firm's shares, which plunged 8.7 percent, or $2.81, to $29.48.

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Lehman's capital-raising is comprised of a $4 billion offering of 143 million shares priced at $28 a share and about $2 billion of preferred shares with an 8.75 percent coupon.

The offering dilutes Lehman's outstanding shares by one-third and brings its total capital-raising endeavors since the beginning of the year to $14 billion.

Former AIG Chairman Hank Greenberg publicly announced on CNBC that he had taken a significant portion of the offering and expressed confidence in Lehman CEO Dick Fuld.