Lehman (LEH) CEO Dick Fuld has another rumor to deal with today...but this one might help the stock price. The New York Post, citing anonymous sources, is reporting that Lehman's management is mulling a privatization plan.

Exactly how the deal would work remains unclear, but in a report released yesterday, a Fox-Pitt bank analyst suggested that Lehman could go private at a 25% premium to its current stock price.

Lehman's shares have tumbled 79% so far this year and 37% last week on rumors of insolvency. 30% of outstanding equity is held by employees. The Post:

Details on how such a take-private maneuver might work are not clear. However, the rationale is that the free-fall in Lehman's shares, which tumbled as much as 15 percent yesterday, is attracting hungry vultures hoping to snap up the ailing fixed-income shop on the cheap. "The idea is why sell to someone else at so cheap a price when they could buy themselves," noted one source.

If the reports are true, they suggest that Lehman employees and insiders are confident enough in the firm's position to want to redouble their bets. Then again, it could all just be a ploy by LEH management to try and prop up a stock price that is circling the drain.

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