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View Full Version : JP Morgan Chase Buys Bear Stearns for 93% off--$2 a Share


'Hamas' Jenkins
03-16-2008, 11:30 PM
http://www.huffingtonpost.com/2008/03/16/bear-stearns-forced-to-se_n_91792.html

The stock was at 70 bucks THIS WEEK.

:spock:

This reeks of something foul to me.

Silock
03-17-2008, 12:48 AM
Tomorrow won't be fun for us. Asian markets are WAY down today.

SBK
03-17-2008, 12:52 AM
http://www.huffingtonpost.com/2008/03/16/bear-stearns-forced-to-se_n_91792.html

The stock was at 70 bucks THIS WEEK.

:spock:

This reeks of something foul to me.

Bear Stearns hit the crapper on Friday. They were bought like this because it was this or bankruptcy.

This is what happens when an 85 year old investment firm stakes it's future on mortgages on properties that are both over valued and filled with people who cannot afford them....

The fed had to guarantee 30 billion in debt for JP to do the deal. They bought the firm on the cheap, but they're taking a ton of bad debts on too. Bad day to own Bear Stearns stock....oops.

ClevelandBronco
03-17-2008, 01:47 AM
Stock prices are nothing more than a perceived value. The only thing that smells foul so far is last week's shareholders' evaluations.

I hope this turnaround didn't hurt very many investors who held ownership positions in the firm.

Chase made a great buy.

Mr. Flopnuts
03-17-2008, 01:53 AM
It just smells of desperation to me.

'Hamas' Jenkins
03-17-2008, 02:16 AM
Stock prices are nothing more than a perceived value. The only thing that smells foul so far is last week's shareholders' evaluations.

I hope this turnaround didn't hurt very many investors who held ownership positions in the firm.

Chase made a great buy.

And I'm sure that none of the top brass got their golden parachutes before the price completely disintegrated.

Stewie
03-17-2008, 08:06 AM
Is anyone surprised? I posted about Bear Stearns back in September.

http://www.chiefsplanet.com/BB/showpost.php?p=4192542&postcount=123

HonestChieffan
03-17-2008, 08:38 AM
BS was totally illiquid and had to have a cash infusion ...was eier make a deal, go under, or govt bailout. This is probably good for the long term.

Fat Elvis
03-17-2008, 08:41 AM
JPMorgan got a steal.

The Fed insures the CDOs that JPMorgan is assuming from Bear Stearns; there is speculation that 90% of that portfolio is still very profitable, but no one really knows for sure. To put it in another perspective, JPMorgan just bought the Bear Stearns building for 25 cents on the dollar.

Amnorix
03-17-2008, 09:17 AM
Is anyone surprised? I posted about Bear Stearns back in September.

http://www.chiefsplanet.com/BB/showpost.php?p=4192542&postcount=123


Wow, nice job. Any other stock you suggest I sell short? :eek:

bkkcoh
03-17-2008, 09:23 AM
JPMorgan got a steal.

The Fed insures the CDOs that JPMorgan is assuming from Bear Stearns; there is speculation that 90% of that portfolio is still very profitable, but no one really knows for sure. To put it in another perspective, JPMorgan just bought the Bear Stearns building for 25 cents on the dollar.

It will be interesting to see what Chase stock does today. At this time is is up $1.50+ a share. Seems like wall street likes the transaction.

Hydrae
03-17-2008, 01:44 PM
JPMorgan got a steal.

The Fed insures the CDOs that JPMorgan is assuming from Bear Stearns; there is speculation that 90% of that portfolio is still very profitable, but no one really knows for sure. To put it in another perspective, JPMorgan just bought the Bear Stearns building for 25 cents on the dollar.

Yes, each and every one of us is on the hook if this whole thing winds up going under. I believe it was to the tune of $30B which is only about $100 for every man, woman and child in the country. :rolleyes:

sd4chiefs
03-17-2008, 09:11 PM
Wow, nice job. Any other stock you suggest I sell short? :eek:

http://finance.yahoo.com/q?s=bsc

Click on this link and then click on insider transactions. There were some big shots in the company who were selling of all of thier stock options a few months ago. That a good way to tell if something bad is going to happen.

pikesome
03-17-2008, 09:20 PM
And I'm sure that none of the top brass got their golden parachutes before the price completely disintegrated.

In this instance the top brass are getting f'd like every one else. Apparently 1/3 of BS is/was owned by employees and it was a status thing, the big cheese reportedly had most of his approx $1B personal net worth in BS stock.

Even the company's top management was required to own significant stakes. Former Bear Chief Executive Jimmy Cayne's was worth nearly $1 billion as recent as last year when the firm's stock was at $170. That paper wealth has now evaporated.

http://www.foxbusiness.com/markets/industries/finance/article/bear-bailout-employees-fortunes-vanish_520815_9.html

Taco John
03-17-2008, 09:58 PM
Is anyone surprised? I posted about Bear Stearns back in September.

http://www.chiefsplanet.com/BB/showpost.php?p=4192542&postcount=123



I'm not suprised. I've been wishing more people would pay careful attention to what you have to say for awhile now.

ClevelandBronco
03-17-2008, 11:35 PM
Tomorrow won't be fun for us. Asian markets are WAY down today.

That's a hell of a prediction. Can I subscribe to your newsletter?

Silock
03-18-2008, 01:48 AM
That's a hell of a prediction. Can I subscribe to your newsletter?

Sure. Look at the markets in the rest of the world, and how much they're losing and tell me if you think it's not going to end up with some kind of ripple effect over here. Didn't happen today, and may not for a while with the Fed continuing to cut interest rates like it's going out of style. But it will get ugly pretty soon. I don't think we'll get to a terrible recession or anything, but this isn't over. I have no problem admitting I was wrong about bad things happening today, although it is worth noting that the Dow was down nearly 200 points in the middle of the day. I'm glad it rallied. I'm not rooting for our economy to go in the toilet.

eazyb81
03-18-2008, 11:32 AM
In this instance the top brass are getting f'd like every one else. Apparently 1/3 of BS is/was owned by employees and it was a status thing, the big cheese reportedly had most of his approx $1B personal net worth in BS stock.


Exactly. BS paid out the majority of their bonuses in stock options, so the top guys saw their paper earnings get wiped out in a matter of months. That said, the majority of workers at Bear Stearns aren't i-bankers or traders making 6 and 7 figures a year; rather, it's the back office people just trying to make a living, and they are the ones who got royally F'd in this deal.

pikesome
03-18-2008, 12:27 PM
Exactly. BS paid out the majority of their bonuses in stock options, so the top guys saw their paper earnings get wiped out in a matter of months. That said, the majority of workers at Bear Stearns aren't i-bankers or traders making 6 and 7 figures a year; rather, it's the back office people just trying to make a living, and they are the ones who got royally F'd in this deal.

Better than complete bankruptcy. Not a lot better but it could have been worse.

eazyb81
03-18-2008, 12:31 PM
Better than complete bankruptcy. Not a lot better but it could have been worse.

Well $2 is better than $0, but this stock was trading at $150 just a year ago. I doubt the $2 buyout price consoled many shareholders.

Amnorix
03-18-2008, 12:35 PM
Better than complete bankruptcy. Not a lot better but it could have been worse.

Alot better. Bankruptcy would have triggered far worse fallout in the markets. Dumping a massive portfolio of immoveable mortgages on the markets would have triggered a real nightmare.

pikesome
03-18-2008, 12:35 PM
Well $2 is better than $0, but this stock was trading at $150 just a year ago. I doubt the $2 buyout price consoled many shareholders.

I bet we could find some Enron folks who'd take it. Regardless it sucks if you were holding BS stock.