Troubled US bank Lehman Brothers has reported a massive third quarter net loss and outlined radical plans to strengthen its finances.
Lehman said it made a loss of of $3.9bn (£2.2bn) between June and August, taking its losses this year to $6.6bn.
To shore up its weak financial position, it has slashed its dividend and will sell a stake in its lucrative fund management arm.
However, no "white knight" investor has stepped forward to bolster the firm.
The fourth largest US investment bank will also reduce its exposure to residential mortgages and spin off its commercial real estate business as part of the shake-up.
Shares rebound
Lehman shares, which had plummeted 45% on Tuesday, fell further after the trading statement, but by nowhere near as much.
They ended Wednesday trading down 6.9%.
"The markets may have responded better if they (Lehman) had struck a deal at any cost"
"This is an extraordinary time for our industry, and one of the toughest periods in the firm's history," said chairman and chief executive Richard Fuld.
Lehman gave no indication that it had found a backer to offer it a fresh capital injection.
Earlier, Korea Development Bank (KDB) said it had pulled out of talks with Lehman Brothers with regard to possible investment in the US bank.
"We are announcing that we ended talks at this point in time because of a disagreement over conditions of a transaction and considering domestic and foreign financial market conditions," KDB said in a statement.
PESTON'S PICKS
State-run KDB said the decision came because of disagreement over terms and current financial market conditions.
Lehman, the fourth-largest US investment bank, had hoped to secure a deal with the Korean fund before announcing its third-quarter earnings.
"The markets may have responded better if they had struck a deal at any cost, " Steve Goldstein at Marketwatch told the BBC.
"They needed that lifeline," he added.
No Bear Stearns
The Wall Street bank has lost billions of dollars through its badly judged bets on the growth of US sub-prime mortgages - a market that crumbled at the back end of last summer.
But BBC Business Editor Robert Peston insists that Lehman is not in immediate danger of collapse in the style of Bear Stearns earlier this year.
For one thing, it says it has immediate access to $42bn in cash reserves, which he said "looks ample to meet any unexpected calls on its cash".
However, he did add: "But that doesn't mean its in good shape. It still has $54bn of exposure to illiquid and hard-to-monetize commercial real estate, residential mortgages and high-yield acquisition finance."
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