Investors see red as JP Morgan gobbles up Bear Stearns for $2 a share
The financial world got a rude jolt as JPMorgan Chase & Co., backed by the Government, confirmed their acquisition of 85 year old Wall Street firm Bear Stearns for $236 million, or $2 per share, a fraction of what it was worth till a while ago, and at a huge discount to it’s book value of $84 per share.
Stunned investors, stakeholders and employees of Bear Stearns are on the warpath, looking at various options to initiate legal proceedings against the company. The company has close to 14,000 employees, who together own almost 30% of the company. They are particularly miffed as CEO Alan Schwartz declared publicly last week that the firm was stable and had around $17 billion in excess cash on it’s balance sheet.
The person likely to take the biggest hit will be British billionaire Joseph Lewis, who bought a 9% stake in Bear last year for around $1 billion.
The only silver lining so far for the beleaguered employees, especially the top performers, is the fact that some of the big daddies of Wall Street are now queueing up to acquire all that talent at handsome salaries and joining bonuses.
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