The deal calls for J.P. Morgan to pay $2 a share in a stock-swap transaction, with J.P. Morgan Chase exchanging 0.05473 share of its common stock for each Bear Stearns share. Both companies’ boards have approved the transaction, which values Bear Stearns at just $236 million based on the number of shares outstanding as of Feb. 16. At Friday’s close, Bear Stearns’s stock-market value was about $3.54 billion. It finished at $30 a share in 4 p.m. New York Stock Exchange composite trading Friday.
Read it again. The company was valued at $3.54 billion Friday at 4PM and sold today for $236 million.
Do you read Calculated Risk? The dollar is crashing and the Asian markets are way off. There are no safe harbors. Billmon predicted this four years ago, before he gave up in disgust.
I read elsewhere that Bear employees owned one-third of the company. They — just the employees — have lost more than $5 billion in the last year.
And those of us in the Finance industry are freaking out!!!
It was worth $20 billion in January.
Also, keep in mind that the NY Fed made a $30 billion loan secured by mortgage backed securities last month, and apparently did so on a non-recourse basis — if the collateral end up being worth less than $30 Billion, the Fed bites the loss.
Then again, the economic impact of that should be to the big banks that own the Fed and not the general public. This shouldn’t make its way into a Congressional appropriation.