The fifth biggest US investment bank, Bear Stearns has witnessed a full circle before its fall and selloff to JP Morgan Chase for paltry $2 per share.
The total deal value is just $236 million (less than even Rs.1000 crore), much much less than the recent BPTP land deal in Noida.
The book value of the company still remains at $84 per share.
The acquisition includes Bear Stearns’ headquarters at Manhattan, which as one of the world’s tallest buildings which alone could fetch more than $1 billion in a sale.
Bear Stearns interesting share price trends
52 Week High – $159.36 (valuing it at $19billion)
March 13, 2008 – $57
March 14, 2008 – $30 (valuation of $4 billion)
March 16, 2008 – JP Morgan buys Bear Stearns for $2
Comparing Bear Stearns valuations to its Indian counterparts
Merrill Lynch bought Hemendra Kothari’s 50% stake in DSP Merrill Lynch for $500 million, valuing it at $1 billion.
Kotak Mahindra bought out its stake from Goldman Sachs from two Joint Ventures at a valuation of around $300 million.
Bear Stearns effects on Indian markets
Bear Stearns holds stakes in 120 listed Indian companies, with the largest holding in JP Associates and significant stakes in Havells, Jindal Steel & Power, Opto Circuits and Madhucon Projects.
It has sold shares worth Rs.943 crore in last 2 days in Indian markets thus reducing its portfolio value from earlier high of Rs.2000 crores.
With Bear Stearns biting the dust, questions are being raised about who will be the next victim. A good case in point is the 50% drop in share price in 2 days of another investment bank, Lehman Brothers due to similar liquidity concerns. So take your pick.
Find this article at: http://www.labnol.org/india/markets/the-amazing-tale-of-bear-stearns-and-its-fall-from-highs/2601/
Tags: bankrupt, investment bank, India, Markets
Reader Comments
Indeed Life has come full circle. It was Bear Stearns who didn’t stand by the Top Five when they funded LongTerm Capital Management back in 1998. Bear are now suffering their defeat in the eyes of their competitors.85 years in the business got busted by two bad years of funding subprime paper.That Bear killed themselves is the truth and nobody has to be blamed for that. This is such a sorry day at Wall Street.
Next in line are Lehman, Citi, HSBC and Merrill Lynch.
Written by Ganesh Shenoy on 03.17.08
A bit later it came to ‘day light’ that CEO of Bear Sterns did some good work by preparing much better contract for his fallen company, which was successfully signed.
It will cost JP Morgan more than $30 billion, but the guarantee from Federal Reserve was something similar.
p.s.
Grid pays off for ‘heavenly paid’ bank executives and managers, not for the shareholders and the regular staff. And they don’t really care, if they cause the collapse of the world financial system on their way to their ‘fat bonuses’.
Written by curt s. on 04.02.08
you predicted very well. Lehman brothers is no more.
Written by ajay on 11.06.08