Is $2 a Share a Fair Price for Bear Stearns?
You can’t get anything in New York for $2 nowadays, except maybe a one-way trip on the subway or a hot dog at a street-corner stand. (But don’t splurge: both, together, would run you $4).
But J.P. Morgan Chase can buy each share of Bear Stearns for that price. How is that possible? Is J.P. Morgan paying Bear for its businesses, or is Bear paying J.P. Morgan for a rescue?>>>MORE
Afternoon Reading: All Bear, All the Time
“$2 a share? That has to be a typo. It must be $20 a share.”
That seems to have been the general reaction to the news J.P. Morgan Chase was buying Bear Stearns for $2 a share. Alas, it wasn’t a typo. It is, though, a staggering number–one-15th of Bear’s market value at the close Friday and well off the 52-week high of $159.36.
Given that 30% of Bear’s stock is held by insiders, its employees aren’t only worrying about layoffs this morning, they also have seen the value of their Bear holdings crumble, as Reuters DealZone blog reports.>>>MORE
What Was J.P. Morgan Thinking?
What is J.P. Morgan getting out of its Bear deal?
A great steal? Or a great pile of liabilities?
To answer the question, Deal Journal brings you the highlights from last night’s conference call, which included J.P. Morgan CFO Mike Cavanagh and co-CEOs of investment banking Bill Winters and Steve Black. In their own words, they explain what they saw in Bear. You can also see the full transcript of the call if you click here, courtesy of Thomson StreetEvents. You can also find the investor presentation here.>>>MORE