Bear Stearns Closes in on Deal To Sell Itself to J.P. Morgan

The Wall Street Journal ^ | March 16, 2008 | Dennis K. Berman, Susanne Craig and Kate Kelly

[ThePythonicCow]

Bob Brinker is reporting on the air now (his Sunday evening radio program) that JPMorgan is working a deal to buy Bear Stearns, and hopes to announce before the market opens, Monday morning. He says they are valuing Bear Stearns at about $2.2 billion. This works out to over $18/share. Bear Stearns opened Friday at $57 and closed down at $30. Brinker's referencing the Wall Street Journal for this. The Wall Street Journal Online has the following article:

Bear Stearns Closes in on Deal To Sell Itself to J.P. Morgan By Dennis K. Berman, Susanne Craig and Kate Kelly Word Count: 1,327 | Companies Featured in This Article: Bear Stearns, J.P. Morgan Chase

Bear Stearns Cos. was closing in on a deal Sunday afternoon to sell itself to J.P. Morgan Chase & Co., as worries deepened that the financial crisis of confidence could spread if Bear failed to find a buyer by Monday morning.

People familiar with the discussions said all sides were pushing hard to complete an agreement before financial markets in Asia open for Monday trading.

[ThePythonicCow]

This is also being reported an CNNMoney, Reuters, and the International Herald Tribune.

[KantianBurke]

Whats the signifigance of this move? Will this stop the hemoraging?

[ThePythonicCow]

The Bear Stearns Companies Inc. (Public, NYSE:BSC)

30.00 -27.00 (-47.37%) Mar 14 - Close

Open:

54.24

Mkt Cap:

3.54B

P/E:

50.26

Dividend:

0.32

High:

54.79

52Wk High:

159.36

F P/E:

10.48

Yield:

4.27

Low:

26.85

52Wk Low:

26.85

Beta:

1.24

Shares:

118.09M

Vol:

186.99M

Avg Vol:

11.94M

EPS:

0.60

Inst. Own:

77%

After Hours: 29.91 -0.09 (-0.30%)  -  Mar 14, 7:59PM ET

[CodeToad]

I guess the Bear turned bear.

[montag813]

Absolutely devastating. Bear Stearns is now valued at ONE-EIGHTH the valuation of Facebook!

Empty your portfolio of brokers if you haven't already. Their business model is dead. However the big banks will reap a huge windfall from this sea change.

[SlapHappyPappy]

Well, it shows that some of the very big banks are still grossly overvalued by the market, among other things.

[montag813]

"You're thinking of this CDO all wrong. As if they had the money back in a safe. The money's not here. Your money's in a super senior synthetic tranche hedged with a CDS on Joe's house...right next to yours. Supported by the excess spread from the Kennedy house, and Mrs. Macklin's house, and a hundred others. Why, you're lending the Orange County firemen's retirement fund the money to short builders commercial paper, and then, they're all going to pay it back to you as best they can."

"I'm worth more dead than as Bear Stearns CEO!"

"Everytime Ben Bernake sings, a broker gets his wings!"...

[janetjanet998]

Jum cramers infamous meltdown live on CNBC last AUG

http://www.youtube.com/watch?v=SWksEJQEYVU

[ThePythonicCow]

JPMorgan Chase has a market capitilization of over fifty (50) times the value they are placing on Bear Stearns. Bear Stearns had critical business in facilitating certain Wall Street transactions. This is a no-brainer in my view; just JPMorgan using the opportunity to pick up another pawn on the giant chess board, a key pawn that could not be allowed to vanish.

That this is happening means nothing much.

If this, or something like it, didn't happen, that would be incredible.

[TCats]

Very, very good!

[ThePythonicCow]

Will this stop the hemoraging?

I'm deeply bearish; so in my estimation, this won't stop the hemoraging, no.

Those who are more bullish will be confident that this is an important move to the upside.

So, the answer to your question depends on whom you ask.

[Bender2]

Re: Bear Stearns Closes in on Deal To Sell Itself to J.P. Morgan

Shades of a hunder year ago, isn't it? Looks like... J.P.'s man has seen Bear Sterns' man, eh

For those historically challenged, go to HERE for "JP Morgan known as "Jupiter" on Wall Street came to the White House after TR said he was going to do something that no other president had ever tried to do. He was going to sue in court to break up an economic monopoly, JP Morgan's Morgan Securities Company, and Morgan came to see the president and he said, if we've done something wrong, why don't you send your man to see my man and we can fix it."

[abb]

What this means is there’s always a price. In business, nothing is worth zero nor worth infinity. It’s what makes a market.

People have bought distressed property for a low price ever since the first caveman traded a moth-eaten animal cloak for a shiny new flint axe.

The world will not end tomorrow. Or the next day.

[Mark was here]

Hope they get the bonus checks and golden parachutes out tonight! /sarc.

[Proud_USA_Republican]

What a disaster.

[abb]

NPR is not the most impartial source to cite for business history.

Myself, I think business, both large and small, has been wrongly tarred by history.

J. P. Morgan was not nearly the evil genius portrayed by pop history. Nor was John D. Rockefeller.

Just about everyone who writes the history books are teachers, professors and all such types who believe in the Greater Good of More Government.

Don’t pay them too much attention.

[jsh3180]

I bet reclusive British billionaire Joe Lewis is none too happy. He bought 15% of Bear Stearns this past summer for over $100 per share, he thought it was undervalued then. He’s taking quite a haircut.

[bjs1779]

LOL!

.

From left to right: J.P. Morgan - Bear Stearns

[ThePythonicCow]

Hope they get the bonus checks and golden parachutes

When you see the over sized bonuses and golden parachutes, then that just means that the big players have gone short; get it while you can because there might not be a tomorrow.

The likely value of their jobs (not what us peons might think their value, but rather what they might expect to get) was this big all along. But in better terms, with good long term prospects, they are willing to take more futures, such as stock options.

[ThePythonicCow]

What a disaster.

Thanks for the stock chart - nice graph.

Be prepared to see more like that (so says this bear-cow ;).