Can you even imagine how sick these poor people must feel tonight???


"One of the more stunning developments of the Bear Stearns (BSC) fire sale is that many of the firm's 14,000 employees, as well as the firms many thousands of shareholders, have just watched their stakes in the company go up in smoke.


What's more, Sunday's news that JPMorgan Chase (JPM) would purchase Bear for $236 million, or $2 a share -- a fraction of its value even from the close of trading Friday -- sent fears that there might not be much of Bear Stearns left when the merger is set to be completed later this year.

"This is gonna go down as the biggest theft in all of financial history, said William Smith, portfolio manager of Smith Asset Management and a former Bear employee. "The $2 a share stock price is more symbolic than anything because the alternative is nothing."


"This is one of the unfortunate stories on Wall Street. I'm a former Bear guy. I have friends over there. My friends just watched their fortunes vaporize," Smith added.


The deal between JPMorgan and Bear was whipped together over the weekend to save Bear from both bankruptcy and possible liquidation. If approved by Bear shareholders, it will bring an end to the company's 85-year-old history.


Bear's employees currently own about one-third of the firm's stock. It was considered a point of pride among Bear employees to own stock in the firm, and selling that stock was considered bad form. Indeed, employees often received their annual bonuses in the form of stock. Bonuses received recently are now basically worthless.

Even the company's top management was required to own significant stakes. Former Bear Chief Executive Jimmy Cayne's was worth nearly $1 billion as recent as last year when the firm's stock was at $170. That paper wealth has now evaporated.

Another big loser in this deal might be British billionaire Joseph Lewis, who currently owns a 9.6% stake in Bear. In just a few months Lewis has lost about $1.16 billion in paper wealth.



It doesn't have to be just paper wealth that are going up in smoke. According to CNBC's Charlie Gasparino, JPMorgan is expected to lay off more than half of the company's 14,000 employees.

Combined with the stock's collapse, that places at least 7,000 highly-paid employees both poor and unemployed.

The plummeting shares of Bear is already causing shareholders to call their lawyers. The law firm Coughlin Stoia Geller Rudman & Robbins said it has filed a class action suit against Bear Stearns, claiming that company's executives were negligent in their duties to both employees and shareholders, according to Reuters.

According to the terms of Sunday's deal, JPMorgan will exchange 0.05473 of its shares for one share of Bear Stearns. It values Bear at just $236 million, compared to Bear’s Friday market capitalization of $3.54 billion.

The deal is expected to close in the next 90 days, and is subject only to shareholder approval, which both banks expect to happen.

"JPMorgan Chase stands behind Bear Stearns," said JPMorgan Chief Executive Jamie Dimon in a press release Sunday. "Bear Stearns' clients and counterparties should feel secure that JPMorgan is guaranteeing Bear Stearns' counterparty risk."

Shareholder approval could become a point of contention. In a conference call Sunday night, an individual shareholder asked JPMorgan why this deal was better than bankruptcy. When JPMorgan officials refused to answer and directed the question to Bear, the shareholder defiantly told JPMorgan he would vote down the merger.

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" You've Been Thunder Struck ! "

[quote=Karried;133698]Can you even imagine how sick these poor people must feel tonight???


"One of the more stunning developments of the Bear Stearns (BSC) fire sale is that many of the firm's 14,000 employees, as well as the firms many thousands of shareholders, have just watched their stakes in the company go up in smoke.


What's more, Sunday's news that JPMorgan Chase (JPM) would purchase Bear for $236 million, or $2 a share -- a fraction of its value even from the close of trading Friday -- sent fears that there might not be much of Bear Stearns left when the merger is set to be completed later this year.

"This is gonna go down as the biggest theft in all of financial history, said William Smith, portfolio manager of Smith Asset Management and a former Bear employee. "The $2 a share stock price is more symbolic than anything because the alternative is nothing."


You're not a fan of free market capitalism?

I'm not a fan of people being encouraged to buy company stocks and then becoming destitute...

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" You've Been Thunder Struck ! "

Just an idiot's knee-jerk response to this...See...The way I'm looking at it...Well...If people that work for an investment firm, have their entire "fortune" invested in ONLY their own company...I sure as hell would never give that firm MY money to invest because those retards didn't know how to diversify their own house.

That said, it's pretty sad that this happened.

What I'm wondering is...How are the outbound execs going to be compensated by the new owners? If they get ONE DIME, it's too much. Especially after Uncle Sam was a facilitator in this whole sale that was brought about by their bad decision making.

Did you just call me an idiot? Don't make me come over there.

Actually, my first thought was also why the heck didn't these people diversify?

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" You've Been Thunder Struck ! "

My nephew works for Bear Sterns in NYC and I know he had a lot of money in their stock. I'm sure he was smart enough to diversify, but it's still a big blow. Luckily, he's already gotten two other job offers within 24 hours of the news coming down.

lol.. I was describing my own response, not yours. That was MY idiot response to this whole deal. Sorry 'bout that.

You're a lucky man... lol ... you know I have anger issues....like road rage you know .. that's why I have tinted windows.

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" You've Been Thunder Struck ! "

I think I'm going to throw up.

Zofran is your friend.

Did none of the Bear folks see any of the coverage of Enron?...The execs pumped the stock til the bitter end

I'm pretty sure there was more than one segment on how much money was lost by employees who had WAY too much tied to a single stock

I do feel horrible for the folks that weren't...Likely several thousand of them now have to start all over building their retirement

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Dr. Spaceman: Now Jenna, medically speaking for your height your weight puts you what we call the "disgusting" range. Fortunately there are solutions. For example, crystal meth has been shown to be very effective. How important is tooth retention to you?

Hopefully your financial portfolio didn’t include stock in Bear Stearns, but it might have if you had listened to CNBC’s Jim Cramer.

After it was announced March 16 that J.P. Morgan Chase & Co. (NYSE:JPM) was purchasing Bear Stearns Cos. (NYSE:BSC) for $2 a share, the stock plummeted over 80 percent at the open of trading on March 17.

But, on March 11, Cramer told an e-mailer not to sell the beleaguered investment bank’s stock on his show’s Web site:

“Dear Jim: Should I be worried about Bear Stearns in terms of liquidity and get my money out of there? --Peter
Cramer says: “No! No! No! Bear Stearns is not in trouble. If anything, they’re more likely to be taken over. Don’t move your money from Bear.”

Cramer frequently appears on “NBC Nightly News” and “Today.” On the January 22 “Nightly News,” Cramer was referred to by his colleague Carl Quintanilla as “one of the most influential voices on Wall Street.”

On the “Today” show March 17, Cramer maintained that “if you’re a diversified investor, you’re not going to get hurt” by the Bear Stearns collapse. “Those who only had their money in Bear obviously will get wiped out today. But you most importantly don’t have to take your money out of a bank,” he said.

Cramer clarified his remarks on CNBC’s March 17 “Street Signs”:

“Look, let’s understand two things,” Cramer said. “I said the common stock was worthless on Friday, as soon as this thing was at 36 because we saw a look at the bonds. If you kept your money in Bear you made out. You got the liquidity. Keeping money at Bear – I guess I could have caused a run on the bank and said take your money out of Bear. I guess people could say hold it, he’s saying buy the common stock. I mean, what the heck. I cannot cause a run.

It turned out the Federal Reserve guaranteed the money. I’m not going to tell people to pull money out of these places. The Federal Reserve is guaranteeing the money. They are not guaranteeing the equity.

I got a lot of things wrong in my life, but I don’t regret the fact when I said don't take your money out of Bear. If you have your money in Bear you still got it today.

Remember, there’s Bear Stearns the common and that person was going to pull the money out of Bear. We got a guarantee. J.P. Morgan is now Bear.”

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" You've Been Thunder Struck ! "

Yes Zofran is my friend. Is he back here?

Oh great. I mean...we were going steady, we broke up
and he's back?

Here?
Now?

YouTube - James Taylor & J.D. Souther - Her Town Too