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• Good will on Wall Street

  Posted Mar 24 2008, 10:48 AM by Matt Koppenheffer
  Filed under: CAPS, Bear Stearns, JPMorgan
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  After the shocking announcement last week that JPMorgan was buying beaten-down Bears Stearns for $2 per share, the bank conceded on Monday to raise the buyout price to $10 per share. Call it the spirit of Easter, or just that warm feeling from the beginning of spring, but the amended offer strikes me an awful lot like a gift from JPMorgan.
  
  Not everybody agrees with me though. Right now the field is split between those that think that Bear is worth substantially more than the original $2 deal, and those that think that the original $2 was a gift itself. For Bear Stearns' shareholders, the $10 per share is probably cold comfort anyway -- the price represents a 66% cut from the stock's price the Friday before the original $2 deal was announced, and a nearly 95% drop from its peak price of around $170.   Read More...

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• Bear Stearns got bailed out?

  Posted Mar 19 2008, 12:07 AM by Matt Koppenheffer
  Filed under: CAPS, Bear Stearns, JPMorgan
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  If Bear Stearns got a bailout this week, then it's sure news to the company's shareholders. The price that JPMorgan is expected to pay is around 1% of the company's value last year and in the range of 5% of what it was fetching on Friday when the original plan was announced for JPMorgan to loan Fed money to Bear.
  
  So who did get bailed out here? On the top of my list are Bear's creditors. At the end of Bear's most recent fiscal year it had $11.6 billion in unsecured short term debt and another $68.5 of longer term debt on its books -- and that's not to mention the hundreds of billions of other liabilities that the company had. If the super-duo of JPMorgan and the Fed hadn't swooped in those creditors are likely working with bankruptcy courts to sort out what they could recover.   Read More...

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