Posts belonging to Category Bear Stearns



Bear Stearns Probe Abruptly Ended By SEC

 

On April 23, The Wall Street Journal reported that the Securities and Exchange Commission has refused a congressional request to disclose why the investigation into Bear Stearns was dropped. The purpose of that investigation was to determine if the firm harmed investors by improperly valuing complex debt securities. In a letter dated April 2, the […]

Bear Stearns’ Collapse Affects Main Street America

 

As a result of the subprime securities crisis and the ensuing credit crunch, a “run on the bank” at Bear Stearns forced the company to sellout to J.P. Morgan for just $10 a share, far below its reported book value. Once the country’s fifth-largest investment bank, the sudden collapse of Bear is the latest sign […]

Bear Stearns Fire Sale Creates a Frenzy in the Financial Markets

 

Last week when J.P. Morgan announced a Fed-supported acquisition of Bear Stearns for the fire sale price of $236 million (roughly $2/share), it unleashed a frenzy of activity in various corners of the financial markets which will play out over the coming months. The transaction has already resulted in strong dissention from shareholders, in legal […]

Can Other Firms Avoid Bear Stearns’ Fate?

 

Bear Stearns’ pending acquisition by J P Morgan Chase has caused investors to question how Bear, which had nearly $400 billion in assets and $12 billion in shareholder equity, went from normalcy to near bankruptcy in seven days. Some experts blame Bear’s fall on opaque assets, derivatives exposure and liquidity demands. The fact however remains […]

Wall Street Firms Scramble To Raise Cash And Stabilize Operations

 

Wall Street brokerage firms and investment banks are desperately struggling to raise large amounts of cash to stabilize their operations after the recent adverse events relating to the subprime meltdown and the resulting credit crunch. Many banks are selling loans, especially leveraged buyout loans, at deep discounts. Such actions raise cash and remove these loan […]

Is Lehman Brothers Next?

 

Will the subprime crisis and resulting credit crunch claim more victims? The rapid demise of Bear Stearns and its ensuing fire sale to J.P. Morgan has lead to rampant speculation about whether other firms are on shaky ground and likely to experience similar disasters. Recent press articles have stated that Lehman Brothers, a firm that, […]

Has Bear Stearns Run Out Of Money?

 

Bear Stearns today saw its price per share hits its lowest level since 1999. The stock hit $60.26 earlier today before re-bounding to $63.02 at 3:00 p.m. As quoted in Bloomberg.com, Michael Mainwald, head of equity trading at Lek Securities said, referring to Bear Stearns, “There’s an insolvency rumor and concerns on liquidity, that they […]

Criminal Probe Of Bear Stearns May Center On Investor Call

 

Today’s Wall Street Journal reported in an article by Kate Kelly that the criminal investigation into the collapse of two internal Bear Stearns hedge funds could hinge on whether the funds’ managers misled investors during a conference call in the Spring of 2007. In an investor call held on April 25, 2007, Ralph Cioffi, the […]

Wall Street Job Cuts Expected

 

The US securities industry employed a record 848,600 people as of September 2007, according to the “Back of the Envelope” graph in the January 4, 2008, New York Times Business Section. This eclipsed the previous peak set in March 2001. But as the Times noted, Wall Street firms are expected to make deep job cuts […]

Bear Stearns’ Hedge Fund Problems Worsen

 

The news only appears to be getting worse for Bear Stearns and investors in its two failed hedge funds, the High-Grade Structured Credit Strategies Enhanced Leverage Fund (the “Enhanced Fund”) and the High-Grade Structured Credit Fund (the “High-Grade Fund”).    Last May, when investors tried to get out of the funds after learning that losses  […]