Bear Stearns Sold

The days of Bear and Stearns being an independent firm may be over. JP Morgan which on Friday rode to the rescue of Bear Stearns bought the firm on Sunday at a fire-sale price of $2 a share or $236.2m.

That the company’s board – which presumably was more familiar with its finances – would part with the company for so little money suggest it felt it could not wait any longer without the risk of getting even less.

JP Morgan executives said during a conference call held Sunday night that they noted that the offering price, which comes at a steep discount to Bear Stearns book value price of $84 per share, was to provide the company ”margin for error”.

”A $2 per share price will send a shudder through every investment bank investor in the world.” said James Ellman, head of SanFranciso-based Seacliff Capital, a hedge fund specializing in financial services.

In his own statement Sunday, CEO Schwartz said ”The past week has been an indcredibly difficult time for Bear Stearns. This transaction represents the best outcome for all of our constituencies based upon the current circumstances.”

It was unclear what would become of Bear Stearns 14,000 employers worldwide.

{Adapted from International Press Reports}

See our articleUK Billionaire Loses $800m On Wall Street.

One Response to Bear Stearns Sold

  1. Pingback: JPMorgan Cutting 55% Of Bear Stearn’s Staff « Bajan Global Report

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