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03-17-2008, 04:31 PM
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#61
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Thinks s/he gets paid by the post
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,455
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 Quote:
Originally Posted by Bigritchie
170 a share a year ago, and sold at 2 bucks a share....
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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.
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May we live in peace and harmony and be free from all human sufferings.
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03-17-2008, 05:09 PM
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#62
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Thinks s/he gets paid by the post
Join Date: Jan 2006
Posts: 1,645
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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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03-17-2008, 05:32 PM
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#63
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: May 2005
Posts: 17,244
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Quote:
Originally Posted by Spanky
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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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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03-17-2008, 05:59 PM
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#64
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Recycles dryer sheets
Join Date: Jan 2008
Posts: 160
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Quote:
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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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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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03-17-2008, 06:07 PM
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#65
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Thinks s/he gets paid by the post
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,455
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Quote:
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Heads I win. Tails you owe me millions in severance. There's no way for CEOs to lose.
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That's kind of game that I like to play.
__________________
May we live in peace and harmony and be free from all human sufferings.
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03-17-2008, 06:21 PM
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#66
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Thinks s/he gets paid by the post
Join Date: Oct 2006
Posts: 4,629
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Quote:
Originally Posted by quietman
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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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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03-17-2008, 06:30 PM
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#67
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Thinks s/he gets paid by the post
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,455
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The new $2 dollar bill:
__________________
May we live in peace and harmony and be free from all human sufferings.
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03-17-2008, 11:14 PM
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#68
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gone traveling
Join Date: Aug 2006
Posts: 994
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Quote:
Originally Posted by frayne
You mean that $200K I sunk in Bear Stearns Friday wasn't a smart move.
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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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03-18-2008, 02:42 AM
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#69
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Feb 2007
Posts: 5,072
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Quote:
Originally Posted by Helena
How would you like to be in this UK billionaire's shoes ?
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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.
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03-18-2008, 08:17 AM
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#70
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Aug 2006
Posts: 12,483
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Quote:
Originally Posted by chinaco
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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All he needs to do to offset it is find $999,997,000 in gains............ 
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03-18-2008, 10:14 AM
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#71
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Thinks s/he gets paid by the post
Join Date: Dec 2007
Posts: 4,764
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Well if you bought Bear at 2 a share you would be doing really well today 
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03-18-2008, 11:43 AM
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#72
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Full time employment: Posting here.
Join Date: May 2006
Posts: 859
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We need to get a bidding war started and get the stock back up to $30.
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03-18-2008, 11:50 AM
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#73
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Thinks s/he gets paid by the post
Join Date: Aug 2006
Posts: 1,558
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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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03-18-2008, 12:12 PM
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#74
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Full time employment: Posting here.
Join Date: Mar 2005
Location: Northern, Florida
Posts: 925
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Quote:
Originally Posted by dmpi
We need to get a bidding war started and get the stock back up to $30.
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Yeah, then we can all sell @ $30! But who will we sell to? 
__________________
Retired in 2006 at age 49.
"Who among us is smart enough to learn from the mistakes of others?" - Voltaire
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03-24-2008, 07:43 AM
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#75
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Full time employment: Posting here.
Join Date: Nov 2005
Posts: 655
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JP Morgan Chase may raise their bid for Bear Stearns to $10 a share.
Free Preview - WSJ.com
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03-24-2008, 07:47 AM
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#76
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Full time employment: Posting here.
Join Date: Nov 2005
Posts: 655
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03-24-2008, 08:20 AM
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#77
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Thinks s/he gets paid by the post
Join Date: Oct 2006
Posts: 4,629
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Quote:
Originally Posted by Retire Soon
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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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03-24-2008, 08:37 AM
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#78
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Full time employment: Posting here.
Join Date: Nov 2005
Posts: 655
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Text of Agreement
Below is a link that takes you to the language of the agreement:
Free Preview - WSJ.com
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03-24-2008, 09:38 AM
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#79
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Thinks s/he gets paid by the post
Join Date: Aug 2006
Posts: 2,433
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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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03-24-2008, 09:58 AM
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#80
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 1,543
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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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