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Old 03-17-2008, 05:31 PM   #61
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170 a share a year ago, and sold at 2 bucks a share....
The final price will most likely be higher since shareholders may reject the offer and ask for a higher price or another bidder may come.
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Old 03-17-2008, 06:09 PM   #62
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I guess I don't understand how it happened again. A big company caught up in a bubble going belly-up. Did they over invest in CDOs? You'd think after the .com bubble companies would be less apt to get sucked into a bubble.
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Old 03-17-2008, 06:32 PM   #63
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The final price will most likely be higher since shareholders may reject the offer and ask for a higher price or another bidder may come.
Probably not... only two showed up this weekend with government backing...

Do you think the government is going to make that offer to others? Probably not since they already have a 'deal' in place....

IMO the only other option is bankruptcy or HOPE that the finances change enough that they do not have to file...

But... when the government backing and JPM goes away... bye bye equity...
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Old 03-17-2008, 06:59 PM   #64
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I guess I don't understand how it happened again. A big company caught up in a bubble going belly-up. Did they over invest in CDOs? You'd think after the .com bubble companies would be less apt to get sucked into a bubble.
All the CEO incentives are set to reward risk takers - no matter how foolish - as long as the gamble pays off. If the gamble fails spectacularly enough there's a chance of bailout. If the gamble fails moderately there's a golden handcuff to ease the CEO out and a new one in. If the gamble just fizzles there's a chance to keep your position and try again. If the CEO is willing to take a spin, he might become fabulously wealthy.

Here we are in the middle of mopping up the mess remaining after Bear implodes and the "hero" will be JP Morgan who rides in with either a steal or an implosion of their own when they dig into the Bear books and find out just how bad the mortgage derivitives positions are. In fact, before the dust settles here's the next big CEO taking a gamble of his own. Heads I win. Tails you owe me millions in severance. There's no way for CEOs to lose.
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Old 03-17-2008, 07:07 PM   #65
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Heads I win. Tails you owe me millions in severance. There's no way for CEOs to lose.
That's kind of game that I like to play.
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Old 03-17-2008, 07:21 PM   #66
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Here we are in the middle of mopping up the mess remaining after Bear implodes and the "hero" will be JP Morgan who rides in with either a steal or an implosion of their own when they dig into the Bear books and find out just how bad the mortgage derivitives positions are. In fact, before the dust settles here's the next big CEO taking a gamble of his own. Heads I win. Tails you owe me millions in severance. There's no way for CEOs to lose.
If I read the news stories correctly, the Fed has somehow guaranteed the value of the BS assets.
I think that means that if JPM finds out the derivatives are worse than they thought, the taxpayers make up the difference.
Of course, they could turn out to be better than JPM thought. In which case, I assume since there is nothing to suggest otherwise, JPM pockets the increase.
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Old 03-17-2008, 07:30 PM   #67
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The new $2 dollar bill:
Attached Images
File Type: jpeg bear.jpeg (9.3 KB, 143 views)
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Old 03-18-2008, 12:14 AM   #68
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You mean that $200K I sunk in Bear Stearns Friday wasn't a smart move.

How would you like to be in this UK billionaire's shoes ?
He bought 10% of Bear in September; and has now lost
hundreds of millions... he's trying to block JPM's takeover.



Billionaire Lewis moves to block JP Morgan

18/03/2008

British billionaire Joe Lewis is working to block JP Morgan Chase's $236m discounted takeover of Bear Stearns in order to negate the $1bn (500m) loss he now faces.


Billionaire Lewis moves to block JP Morgan - Telegraph
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Old 03-18-2008, 03:42 AM   #69
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How would you like to be in this UK billionaire's shoes ?
I can understand how he feels. But he took a risk and it didn't work out.

He may be within his legal right to try to get more money out of the deal.
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Old 03-18-2008, 09:17 AM   #70
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I can understand how he feels. But he took a risk and it didn't work out.

He may be within his legal right to try to get more money out of the deal.
All he needs to do to offset it is find $999,997,000 in gains............
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Old 03-18-2008, 11:14 AM   #71
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Well if you bought Bear at 2 a share you would be doing really well today
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Old 03-18-2008, 12:43 PM   #72
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We need to get a bidding war started and get the stock back up to $30.
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Old 03-18-2008, 12:50 PM   #73
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I was watching Kudlow last night, and they were talking about the Fed changing the rules on Monday so that investment banks can borrow from the Fed just like commercial banks.

Can't BS go to that window now and borrow enough money to get them through any liquidity issues?

Or is their balance sheet so bad that they don't have enough "AAA" paper to use as collateral?

Note-- I don't share Kudlow's rage that this rule was just changed. Seems strange for an "free market capitialism" guy to be angry about the government not giving loans to private companies.
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Old 03-18-2008, 01:12 PM   #74
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We need to get a bidding war started and get the stock back up to $30.
Yeah, then we can all sell @ $30! But who will we sell to?
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Old 03-24-2008, 08:43 AM   #75
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JP Morgan Chase may raise their bid for Bear Stearns to $10 a share.

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Old 03-24-2008, 08:47 AM   #76
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JP Morgan Chase may raise their bid for Bear Stearns to $10 a share.

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http://www.nytimes.com/2008/03/24/bu...er&oref=slogin

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Old 03-24-2008, 09:20 AM   #77
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This is fascinating.

The Fed wanted a price that was low enough to prove that they weren't bailing out BSC's management or shareholders. Now JPM undercuts them by quintupling the offer.

The Fed also wanted to claim that the taxpayer guarantee on the $30 billion of the worst assets was the minimum needed to get JPM to do the deal. Now it looks like the Fed went too far. So the Fed should be negotiationing a reduction in the $30 billion. But that would take the share price back to $2, really ticking off BSC's shareholders.

And then, just to make this more interesting, it appears that the JPM lawyers made a big mistake in drafting the agreement - basically JPM guarantees BSC's liabilities even if the deal does't go through. Wow.

Finally, JPM's CEO seems to be breaking anti-trust or labor laws by calling his peers and trying to persuade them not to hire BSC's employees.
(I'm not a lawyer, so I don't know if he really is breaking the law, but it seems to me that his actions should be illegal.)

Memo to the Fed: When you get in between big, profit-seeking companies, and you're not simply handing money to everybody, you'd better be really sure of what you're doing.
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Text of Agreement
Old 03-24-2008, 09:37 AM   #78
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Text of Agreement

Below is a link that takes you to the language of the agreement:

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Old 03-24-2008, 10:38 AM   #79
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Just to clarify the arithmetic. Under the original deal, BSC shareholders would have received 0.05473 JPM share for each BSC share. Under the revised deal, they will receive 0.21753 JPM shares. So the increase is really 0.21753/0.05473 = 3.9746, or approximately 4 times (not 5) the original amount of JPM shares. The $10 per share number includes the appreciation of JPM stock from 36.50 when the deal was first announced, to Friday's close of about 46, which would have been about a $2.50 (46 x 0.05473) per share value for BSC shareholders, even without the revised deal.
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Old 03-24-2008, 10:58 AM   #80
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over the weekend one of the english newspapers had a story that bear stearns had a derivative book worth more than $13 TRILLION. JP Morgan's book is around $70 TRILLION. both are counterparties to each other on some of their derivative contracts.

Supposedly the Fed's biggest concern was the derivative impolosion of a bear stearns bankruptcy. and JP Morgan gets to not lose any money from it's derivatives with bear even if it spends $1 billion to buy the company

CDS is here and i bet in a few months we will see this again
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