Bear’s Bigger Bid

Anyone who has been around Wall Street for any time knows that investment banks are ships that leak from the top. So when they start spreading rumors about themselves, a subject about which they know considerably more than their usual subjects — you know, like good stocks, bad stocks, and their competitors — they are almost founded on at least some facts, but oodles of emotion and longing too.

All of this, of course, is just another way saying that news of JPMorgan quintupling its Bear bid had to leak. Such things can never stay private. And ss much as CEO Jamie Dimon would like to take Bear out and win the prize for the Best Pillaging of a Brokerage (2008), he knows that being seeing to be neighborly about it matters in this Fed-assisted affair.


  1. Paul,
    Do you know what happens to JPM’s option to buy 20% of BSC at $2 no matter what happens? Does this mean that they exercise that option at $2, so now they make 5x their money and plow that back into the company? So, they effectively get a discount of ~$150MM on this $10 share price? It’s kind of a drop in the bucket when you consider the ~$7B total acquisition cost, but its still $150MM that Jamie Dimon can line his pockets with, right?

  2. JPM seemingly did steal BSC stock but the risks of the acquisition is still unknown. I think investors are being superficially bullish by the fact that it is a fed-backed deal. They priced in a $2 bid acquisition last week so shouldn’t JPM stock decline if they are paying five times more to acquire a questionable company. Nothing fundamentally has changed since the last 2 weeks, silver lining or not.