Bear Stearns to be purchased by JP Morgan

[her209]

Originally posted by: JS80

Originally posted by: Epic Fail
Sucks to be Joe Lewis, he invested 1.1B late last year into BS, barely anything left now.

lol that is truly epic fail

On September 10, 2007, he was in the news for paying $860.4 million in an all-cash purchase of a 7 percent stake in Bear Stearns. By December of 2007 Lewis had risen his stake at the brokerage firm to 9.4%, a total of 11 million shares, for which he paid an average price of $107 apiece. Lewis lost about $1.16 billion of his investment when on March 16, 2008 Bear Stearns was purchased in a straight stock swap with JP Morgan Chase in which JP Morgan paid the equivalent of $2.00 a share for Bear Stearns.

Ouch!

 

[JackBurton]

Originally posted by: Lothar

Originally posted by: Blieb
Jim Kramer ... insert foot ... in ... mouth ....

http://www.liveleak.com/view?i=2b7_1205751955

Own3d.

Note to self, do the opposite this guy says.

 

[Miramonti]

Originally posted by: her209

Originally posted by: JS80

Originally posted by: Epic Fail
Sucks to be Joe Lewis, he invested 1.1B late last year into BS, barely anything left now.

lol that is truly epic fail

On September 10, 2007, he was in the news for paying $860.4 million in an all-cash purchase of a 7 percent stake in Bear Stearns. By December of 2007 Lewis had risen his stake at the brokerage firm to 9.4%, a total of 11 million shares, for which he paid an average price of $107 apiece. Lewis lost about $1.16 billion of his investment when on March 16, 2008 Bear Stearns was purchased in a straight stock swap with JP Morgan Chase in which JP Morgan paid the equivalent of $2.00 a share for Bear Stearns.

Ouch!

That apparently was 1/3 of his wealth. I guess it can't be all that bad to have $2b left, but that's a huge % to lose in one shot.

 

[imported_Lothar]

Originally posted by: her209

Originally posted by: JS80

Originally posted by: Epic Fail
Sucks to be Joe Lewis, he invested 1.1B late last year into BS, barely anything left now.

lol that is truly epic fail

On September 10, 2007, he was in the news for paying $860.4 million in an all-cash purchase of a 7 percent stake in Bear Stearns. By December of 2007 Lewis had risen his stake at the brokerage firm to 9.4%, a total of 11 million shares, for which he paid an average price of $107 apiece. Lewis lost about $1.16 billion of his investment when on March 16, 2008 Bear Stearns was purchased in a straight stock swap with JP Morgan Chase in which JP Morgan paid the equivalent of $2.00 a share for Bear Stearns.

Ouch!

I feel even worse for the employees that invested in the company stock.

BEAR STEARNS COMPANIES INC. 2008 TRUST: 27,316,339 shares
% of Shares Held by All Insider and 5% Owners: 39%


39% of BSC shares is owned by insiders and employees? WTF??? 😕

 

[ponyo]

Originally posted by: Lothar

Originally posted by: her209

Originally posted by: JS80

Originally posted by: Epic Fail
Sucks to be Joe Lewis, he invested 1.1B late last year into BS, barely anything left now.

lol that is truly epic fail

On September 10, 2007, he was in the news for paying $860.4 million in an all-cash purchase of a 7 percent stake in Bear Stearns. By December of 2007 Lewis had risen his stake at the brokerage firm to 9.4%, a total of 11 million shares, for which he paid an average price of $107 apiece. Lewis lost about $1.16 billion of his investment when on March 16, 2008 Bear Stearns was purchased in a straight stock swap with JP Morgan Chase in which JP Morgan paid the equivalent of $2.00 a share for Bear Stearns.

Ouch!

I feel even worse for the employees that invested in the company stock.

BEAR STEARNS COMPANIES INC. 2008 TRUST: 27,316,339 shares
% of Shares Held by All Insider and 5% Owners: 39%


39% of BSC shares is owned by insiders and employees? WTF??? 😕

Yes, big percentage of Bear was owned by its employees. I feel bad for them. Losing your job and losing money. After Enron you would think people learn about investing in the company stock you work for.

 

[sniperruff]

Originally posted by: Naustica
I like how JPMorgan is getting 1.5 billion dollar Bear building by buying Bear for $240 million. Jamie Dimon stole Bear. I bet you Citi wishes they made him the CEO.

http://www.bloomberg.com/apps/...=aHOywqVgdWQA&refer=us

you never know what's in the books at bear. it may end up costing JPM a lot more than $30B... who knows?

Originally posted by: Naustica

Yes, big percentage of Bear was owned by its employees. I feel bad for them. Losing your job and losing money. After Enron you would think people learn about investing in the company stock you work for.

again, nobody can see this coming. i'd sure as hell take any stock options offered if i work for google.

 

[imported_Lothar]

Originally posted by: sniperruff

Originally posted by: Naustica

Yes, big percentage of Bear was owned by its employees. I feel bad for them. Losing your job and losing money. After Enron you would think people learn about investing in the company stock you work for.

again, nobody can see this coming. i'd sure as hell take any stock options offered if i work for google.

I'd take stock options but I wouldn't dump all my 401k into company stock.
I'll never be more than 10-20% in company stock.
That is even with the 10% discount on company stock and the 2 options that come with each share included.

 

[Miramonti]

It's going to get interesting. From what it sounds like, there's no way shareholders will approve the sale. At that point an injunction against selling the building will be sought, and it'll be up to the courts to decide if that contract provision with the board and JPM was legal. I wouldn't be surprised if it isn't, an underhanded clause made to circumvent the wishes of majority of shareholders should they reject the offer. I wonder if there are legal precedents for that.

 

[sniperruff]

Originally posted by: jjsole
It's going to get interesting. From what it sounds like, there's no way shareholders will approve the sale. At that point an injunction against selling the building will be sought, and it'll be up to the courts to decide if that contract provision with the board and JPM was legal. I wouldn't be surprised if it isn't, an underhanded clause made to circumvent the wishes of majority of shareholders should they reject the offer. I wonder if there are legal precedents for that.

considering the stock market might collapse if JPM doesn't buy out BSC and it goes under, the deal has to go through somehow.

 

[Miramonti]

Originally posted by: sniperruff

Originally posted by: jjsole
It's going to get interesting. From what it sounds like, there's no way shareholders will approve the sale. At that point an injunction against selling the building will be sought, and it'll be up to the courts to decide if that contract provision with the board and JPM was legal. I wouldn't be surprised if it isn't, an underhanded clause made to circumvent the wishes of majority of shareholders should they reject the offer. I wonder if there are legal precedents for that.

considering the stock market might collapse if JPM doesn't buy out BSC and it goes under, the deal has to go through somehow.

The shareholders own the company - they can vote any way they want - and you can bet they aren't going to vote for this deal. As for what it does for the stock market if it doesn't go thru...its a free capitalist economy and it will sort itself out. If the fed thinks its that critical for them to survive, they should have regulated or oversaw the industry better, but they can't have it both ways. Drexel went down and the economy/market absorbed it. This was an 11th hour 1/2 @ss deal that should have been handled differently, in the very least.

The irony is that as long as people are getting rich, the govt. doesn't like to do squat about obvious corruption. This was the case during the .com boom which was fueled by widespread deception and conflict of interests etc. that lead to excessively inflated stock prices, and so was the housing boom. Problem was without the housing boom, the economy would have sputtered long ago, which would have been too unpopular, so the govt. and administration turned a blind eye to what many already knew what was going on - the building of a house of cards that couldn't indefinitely sustain itself.

 

[eleison]

Originally posted by: puffff


The $2B number for subprime numbers has been floating around out there for a while now. It's pretty much common knowledge that thats what BSC had in subprime. The fact that we presented that number to JPM, and JPM accepted that number after their due diligence reaffirms it. We had JPM employees all over our building (yes i work at BSC) friday afternoon looking at our books and records, so there's no questioning the numbers.

JPM pretty much had everyone by the balls on this one. They were one of two entities present when bear stearns offered itself up for sale. The other, a private equity firm, had little shot at it. When you have a motivated seller and only one buyer, the buyer can almost name his terms. Hence the $2 share price. And being able to convince the fed, who also wanted to see this deal done, to take on the risk. there's no point in them accepting a deal with no conditions when they're in the driver's seat here.

the other mortgage backed securities that are not subprime havent yet blown up on the scale subprime has. but there are many who believe that's next. JPM wanted to take on as little risk as possible, which is what any sane company would do right now, and so if they were able to get the deal with fed backing, why wouldnt they?

there's no doubt in my mind the company could've continued to operate if it werent for the run on the bank. fundamentally, it was as sound as it was 3 months, 6 months ago. if anything, it was the business model that was at fault, but no one could've predicted fear in the market could have such drastic effects.

Still doesn't make sense. If BSC was such a good company, why must they sell within only a few days? If it was such a good company, why aren't their more suitors -- not just a couple that you mention? Just doesn't add up. The smart people at BSC must know that their building is worth 1.5 billion, but yet the entire company is being bought for only $240million -- how can they allow this to happen unless there is some "funny business" going on.

Also, the Feds must certainly know, if you are correct, that BSC is worth a lot of money, but yet the Feds still need to back the deal for JPM to bite... It was in the news that w/o backing, JPM would not buy...

None of this makes sense if BSC was a "good company". It only makes sense if BSC was a bad company... I say ockman's razor prevails. Just like ENRON or the housing bubble, all the experts said it was "sound", it wasn't until things really started getting bad, that the real reasons were discovered. This is probably the same case...

 

[puffff]

Originally posted by: eleison

Originally posted by: puffff


The $2B number for subprime numbers has been floating around out there for a while now. It's pretty much common knowledge that thats what BSC had in subprime. The fact that we presented that number to JPM, and JPM accepted that number after their due diligence reaffirms it. We had JPM employees all over our building (yes i work at BSC) friday afternoon looking at our books and records, so there's no questioning the numbers.

JPM pretty much had everyone by the balls on this one. They were one of two entities present when bear stearns offered itself up for sale. The other, a private equity firm, had little shot at it. When you have a motivated seller and only one buyer, the buyer can almost name his terms. Hence the $2 share price. And being able to convince the fed, who also wanted to see this deal done, to take on the risk. there's no point in them accepting a deal with no conditions when they're in the driver's seat here.

the other mortgage backed securities that are not subprime havent yet blown up on the scale subprime has. but there are many who believe that's next. JPM wanted to take on as little risk as possible, which is what any sane company would do right now, and so if they were able to get the deal with fed backing, why wouldnt they?

there's no doubt in my mind the company could've continued to operate if it werent for the run on the bank. fundamentally, it was as sound as it was 3 months, 6 months ago. if anything, it was the business model that was at fault, but no one could've predicted fear in the market could have such drastic effects.

Still doesn't make sense. If BSC was such a good company, why must they sell within only a few days? If it was such a good company, why aren't their more suitors -- not just a couple that you mention? Just doesn't add up. The smart people at BSC must know that their building is worth 1.5 billion, but yet the entire company is being bought for only $240million -- how can they allow this to happen unless there is some "funny business" going on.

Also, the Feds must certainly know, if you are correct, that BSC is worth a lot of money, but yet the Feds still need to back the deal for JPM to bite... It was in the news that w/o backing, JPM would not buy...

None of this makes sense if BSC was a "good company". It only makes sense if BSC was a bad company... I say ockman's razor prevails. Just like ENRON or the housing bubble, all the experts said it was "sound", it wasn't until things really started getting bad, that the real reasons were discovered. This is probably the same case...

Text

The headlines say it all. "Without the Fed's $30 billion, JPMorgan Chase couldn't have bought Bear Stearns without writing down its own mortgage holdings." There was more than just the risk of the BSC securities.. JPM would've had to write down their own books.

The article also goes on to explain the fire sale price. It's like an auction with only one bidder. That one bidder is gonna get a great deal if the seller has to sell.

Why did BSC have to sell? Read here.

BSC wasnt the best firm in the industry, and was certainly more exposed than the rest, but until the fear gripped the market and creditors, it certainly could've continued operating.

 

[Koing]

Originally posted by: eleison
In the immortal words of Nelson:

"HA HA"..

With salaries of $200K plus. I'm sure, those that are going to get laid off will be ok for at least a few years.

MOST guys do not pull in 200k basic. Most are 80-120-150k at the upper end. It's the bonus that is big in good times.

NY is PRICEY also so the money gets whittled away.

Koing

 

[Linux23]

Even though the transaction ultimately could leave taxpayers on the hook for losses, the political response so far has been fairly positive. "When you're looking into the abyss, you don't quibble over details," said New York Democratic Senator Charles Schumer.

Not when it's my taxpayer money your gambling away.:|

 

[ElFenix]

Originally posted by: jjsole
It's going to get interesting. From what it sounds like, there's no way shareholders will approve the sale. At that point an injunction against selling the building will be sought, and it'll be up to the courts to decide if that contract provision with the board and JPM was legal. I wouldn't be surprised if it isn't, an underhanded clause made to circumvent the wishes of majority of shareholders should they reject the offer. I wonder if there are legal precedents for that.

giving away half the company to the white knight if the sale doesn't go through to the white knight? iirc, delaware does allow that.

 

[manly]

Originally posted by: jjsole
I'm not finding it. If you know what caused the 'flight of liquidity' over the last couple days please post or link it. Most everyone has had liquidity issues over the past year, but I'd love to know what caused a big change when the CEO said Tuesday liquidity was strong.

I'm not a finance geek, but this long-ish article seems like a good read:

http://tinyurl.com/35tlvm

 

[Special K]

Looks like the deal was approved by Bear's shareholders today:

http://money.cnn.com/2008/05/2...postversion=2008052911