For those who don't want to read all the details, here is the picture that summarizes what probably happened:
Notice two things. First is the green little text in the left upper corner (yeah, 10% is nice) and the jump in the graph. Well, this happens if you buy what cost $170 two month ago for $2.
I can't find other name than "theft", but opinions obviously differ.
P.S. I accept that it is very hard to know what to do, given the "success" of Northern Rock. So maybe this is not that bad after all. Yet it still looks like JPM get itself a pretty good deal.
Monday, March 17, 2008
Bear Sterns and JPMorgan
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2 comments:
I strongly disagree with the word "theft". I think that it is much more complicated, and maybe N-word (nationalization/reprivatization) should be used. If a company has cash-flow problem (bank run), and nobody is willing to borrow it (credit crunch), then this company is worthless (=$2/share?). JPMorgan was willing to buy BS quickly(in two non-trading days).
The movement in JPMorgan share price can mean complementarity (and risk involved) and not theft. JPM has money, BS needs money, but nobody will borrow them... Peta Ch.
Peta Ch.
Yes, you are probably right.I will stick to my doubts - the BS stock increased to $8 a share, there are rumors that the panic (BS) may have been started by somebody with monetary interest etc. I guess will we see in a couple of years, when the lawyers will stop fighting.
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