I wonder how much their CEO that quit 2 months ago got as a payout. The guy from CountryWide is getting like $100M for his fine work.
I'm guessing a large amount of it was stock-based and now...worthless in the case of unexercised options, or worth less, in the case of shares.
The cfc guy deserves the money. He built that company over his years and made his shareholder's money. He just lost money know.
man, is this a sign of more of these to come? is the fed going to bail everyone out? http://www.reuters.com/article/companyNewsAndPR/idUSN1669982620080316
wow i am still just floored by this. it's odd...being a trader you don't develop emotional attachments to stocks but this is still like one of your friends getting dragged out and shot. i mean it is just insane. what's even funnier is that i was looking at buying puts on BSC back when it was in that 55-60 range and i was looking at the 30-40 strikes and thinking "damn these are expensive" ... now i know why. i wish i would have bought them! oh well. GGs BSC! u g0t pwn3d
Typically he would have setup an insurance premium on that stock, consisting of structured derivative collars, in order to mitigate any downward risk. So it's likely he probably made it out of this just fine.
Explain this to me like I'm a six year old. what did the stock close at friday afternoon, how did jpm puy the stock at $2 a share?
The Stock closed at $57 on Thursday. $30 on Friday. The decline on Friday morning was due to an effective ackowledgement of the rumors that Bear was out of cash and couldn't really run it's business. Once it became clear that they were too risky to do business with, instiitutional investors and banks decided to stop doing business with Bear. So they were effectively shut down. The only way to prevent them from filing for bk (a la Enron) was for someone to buy them. There were only a handful of people capable of buying Bear. One of the was reportedly JC Flowers. The best option was JPM. As the negotiations continued over the weekend, JPM was the last bid left. If the Board of Bear didn't accept it, the firm was going to have to file. That would have left the shareholders with nothing and the debtholders with a haricut as well. Given the Board's fiduciary duty, they basically ahd to accept it. The shareholders still have to accept the deal. But they probably will have to. Or they will go under altogether.
Yup, it was around $2 per share for something total of under 300 mil! They say one of their building in New York alone is worth more than a billion, they must be in some serious debt problem for the buyout to be this low.
the fact that sub prime mortgages have brought them down is really ridiculous. how heavily invested were they in that market. we're talking about a huge diverse investment bank. when I wrote that my company has contracts with them, those are in natural gas. these guys invest in everything, how can one market bring them down.
They are highly leveraged, and its not just the subprime market, there are whole slew of fixed income products and their derivatives in trouble. From the dealings I had with them, not surprised they are the first one to go down.
for the life of me i still can't figure out why people are trading BSC this far above the buyout price. the options market is basically pricing in the $2 buyout and the deal seems pretty rock solid at $2 and there are no other suitors. here is the real kicker...if BSC rejects the buyout then JPM is granted the option to buy BSC's $1.9 billion HQ building. who knows....maybe the market is just in total disbelief that BSC is getting bought for $2 and hoping something better comes along. it certainly wouldn't be the first time something dumb has happened in the market. man this buyout is like us trading garbage to the spurs to get scola.
yeah but the stock is trading 250% greater than it's buyout price. that's more than short covering. who knows but i am inclined to believe it is hope that they can get more but they just can't. they are muerte.
