March 16, 2008

Banking dossier: Prior to the market opening, prior to the PPT meeting ..

by Anne Stanley

March 16, 2008
SAN FRANCISCO (MarketWatch) -- J.P. Morgan Chase (JPM:
JPMorgan Chase & Co

Last: 36.54-1.57-4.12%
4:02pm 03/14/2008

36.54, -1.57, -4.1%)
has agreed to buy Bear Stearns [s:bsc] for $2 a share in a stock-swap deal, according to a report in the online edition of the Wall Street Journal citing people familiar with the matter. J.P. Morgan will exchange 0.05473 shares of its common stock per one share of Bear Stearns stock. Both boards have approved the transaction. The Journal reported people familiar with the discussions said all sides were pushing hard to complete an agreement before financial markets in Asia open for Monday trading. The Journal report quotes Treasury Deptartment spokeswoman Michele Davis as saying,
"None of these things is done until they're done. But I think everyone's expectation is sometime in the early evening hopefully"
the deal will be done. End of Story

comments 35 Comments (view all)

Close your position before rumors of the deal falling apart drive the price of BSC rocketing up to $3...

- bluefuzz

so the fed bails bear sterns out on friday, through j.p. morgan, totaling millions. on friday the stock was worth 30+ a share. on sunday the same j p morgan buys the company for $2 a share. so where did all the bailout money from friday go????????? that was supposed to pay clients who wanted to liquidate their accounts. isn't this the same as bear going under and giving themselves away?????

I think at $2 per share is a mistake !

Vik is
I agree! It's about $1.99 too high IMO

$2 a share values BS (pun intended) at $220 million. That bull must be real sick.

It appears the market was overly pessimistic on Friday in leaving BSC at $30 per share. It has rocketed all the way up to $2 without the market being open. So the other banks must be worth thousands. Bargain hunting is in full swing. If a bank stock can climb walls of worry from $57 to $2 in a mere day of trading, think how high the others can climb.

To the moon?
To the sky?

Are the shareholders really buying into this theft? Someone needs to go to jail for this fraud!

Remember EF Hutton. In 1987 they dissapeared overnight too.
Wish I owned puts at $50 a share when they were only .65 on Thursday evening.

But back to the real world. This is one of the 1% of the banks that are in trouble. Shows you how much money is still out there in many ways.

Time to buy bank stocks on great small and midsize banks in retirement areas like Florida, Texas and New Mexico. Over sell means over the top profit as this shakes out.

Most of the banks that are going to dissapear will be gone in the next month or so. Then it's boom time again in the bank stocks.

Many banks will cut their dividend so they can buy banks. Don't worry when they cut the dividend. Watch bank stocks that have huge mutual fund buys and
are well below book value.
Like BBX, FBTX FSNM WHI, FITB and the like.

So $30 is definitely out of the question?
That's got to be great news for the 401ks and ESOPs.
Retirement will have to wait.
Until never. Is never good for you? Works for me.

I think the first of either 3 or 5 to hit the wall. Watch credit default swaps. The excesses of the last two decades need to be washed out, and greedy management replaced. The regulators need to follow through with their promise to focus on stability, and quit focusing on "innovation and growth", these are NOT regulatory functions. These two approaches are what the SandL regulators used to collapse that industry.

Who's gonna bail out Morgan?

That leaves Lehman at what $5 tomorrow. Merril at maybe $10? The garbage is finally getting buried.

I tell you, all the financial sh__ happens during weekends and holidays.

Let's mark to market all of the other investment banks on Wall Street. We now know the true value - 2% of book value. That's probably very generous in reality, but approaching realistic value. The stocks, therefore, of all of the investment banks are worth 98% less than their book value. This is a good start towards proper sound valuation. Let's get the party rolling tomorrow with correctly revaluing the investment banking stocks!

Was that @ $@.00 USD? CDN? AUS? BM?

US, Canadian, Australian and/or Bermudian Dollars?

May I bid, Two Clubs, on this deal too?

So that just about covers the price of their building.

beentherebefore i
Is this legal ? What about all the employees who got paid in stock ? What about all the bargain hunters who bought on the $27 drop on friday ? The margin calls that will result is going to create chaos.. Better to have an orderly liquidation..

hat leaves Lehman at what $5 tomorrow. Merril at maybe $10? The garbage is finally getting buried.

yon77 3 minutes ago

Likely less than the building; 383 Madison is prime real estate in a hot area:

Reply to kryon77

Reply to itsnotrocketscience
beentherebefore 6 minutes ago
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Is this legal ? What about all the employees who got paid in stock ? What about all the bargain hunters who bought on the $27 drop on friday ? The margin calls that will result is going to create chaos.. Better to have an orderly liquidation..

Reply to beentherebefore
WrightOn 4 minutes ago

Just to help give a reference on how much $ we are talking about concerning for example the national debt, I read today that 1 million in tightly packed 1,000 dollar bills would be 4 inches high. 1 billion would be 300 feet high. 1 trillion would be over 62 miles high!

Reply to WrightOn
bob620 3 minutes ago

What a shame that the economy has come to this. So what's JPM worth? $10?? How about Merrill Lynch, Morgan Stanley, others? And the market is going to go up because Wall Street has become worthless?? Interesting!!

Reply to bob620
al00 3 minutes ago

and GS yet to unveil a 3b write down !

Reply to al00
bullishlybearish 3 minutes ago

anyone have any idea what this means for bear stearns shareholders?
for every bear stearns share, u get 0.05 jp morgan share?

Reply to bullishlybearish
sharpshooter 3 minutes ago

Citic just had their pockets picked on Wall Street. Welcome to America!

Reply to sharpshooter
edible 2 minutes ago

I believe they are right on...the crooks ruining these old time banks are definitely not their father's sons. Rather they are the breed that grew up in the "ME" era, with no morals, no ethics, no mothers to watch over them. For shame! The people who were counting on them for retirement can always start over...yeah, right. The line at the end of the Enron party starts tomorrow when the news hits the fan.

Reply to edible
ehoffner 2 minutes ago

LOL! The futures show the market up over 100 points. Take that you short losers!

Reply to ehoffner
MrVincent 2 minutes ago

JPM, get ready to spend the next ten years in court fighting the lawsuits against Bear.

Reply to MrVincent

These deriviatvies are so levered up and in many cases over 20 times and I think that's coming home to roost on many of these firms. We're talking in the CDO market derivative play there is over 100 trillion worth of these derivatives on balance sheets which is I believe 6 times more money than in the entire world!! That is beyond comprehension.

Someone is on the other side of these trades and it's not just BSC...This should be the beginning and people should be selling like mad right now not buying. There is no way to know what securities and risks are on bank and other companies balance sheets.

Reply to wburdett

Well, I think that shareholders have to approve this deal. I do not own the stock, but if I was a shareholder I would never agree with the 2 bucks. I would say, let BS go bankrupt, or offer a better price. I'm sure that they would not let BS collapse in that case.

Reply to Noek
itsnotrocketscience 1 minute ago
BSC Dec 12 2007 $100.84.
BSC Mar 16 2008 $2.00.

Pretty pathetic. So Lehman, Goldman, Merrill, UBS, should be reduced accordingly. About time somebody put a price on this cr___p.

Reply to itsnotrocketscience

Internaional markets were closed on Friday when the Fed/JPM bailout happened... a lot of international traders who owned Bear Sterns will see the stock go from $70 to $2 without having any ability to unload... This will increase their distrust in the U.S. financial markets... part of the reason the Fed acted 2 days early to lower the discount rate... U.S. Stock Futures are up, but this is meaningless... There were a lot of things going on this weekend with margin calls... Just talked to my broker who was in a meeting in Seattle... look for wild swings in Treasuries tomorrow.....

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