JPMorgan Chase Buys Bear Stearns for $240 Million:
March 16 (Bloomberg) — JPMorgan Chase & Co. agreed to buy Bear Stearns Cos. for about $240 million, less than a 10th of its value last week, after a run on the company ended 85 years of independence for Wall Street’s fifth-largest securities firm.
Shareholders of New York-based Bear Stearns will get stock in JPMorgan equivalent to about $2 a share, compared with $30 at the close on March 14, the two companies said in a statement today. The U.S. Federal Reserve will provide financing for the transaction, including support for as much as $30 billion of Bear Stearns’s “less-liquid assets.”
I’m not really sure whether this is a good or bad thing. Bear Stearns stock was trading in the low 30s last Friday. Does this severe depreciation of value mean than things are worse than we could have even imagined? Well, judging by the index futures as of this posting, things are looking bad, but who knows what things will be like next by the end of next week.
Here’s a list of some other recent articles on this mess I’ve been reading.
- Fed acts Sunday to prevent global bank run Monday
- Fears That Bear Stearns’s Downfall May Spread
- The Cost of Bear’s Crisis to Its Employees
- Paulson Defends Fed Bailout of Bear Stearns
- Video of great conversation between Don Luskin and Larry Kudlow on Bear Sterns and the current liquidity situation
- The New Committee to Save the World
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