Tag: Bear Stearns

Best Finance Quote of 2008 (so far)

Jamie Dimon, on determining the purchase price of Bear Stearns:

“Buying a house and buying a house on fire are two different things.”

Watch the entire interview with Charlie Rose at Calculated Risk.

UPDATE: At 40:45 into the video, Dimon talks about what you must have in a management team, with particularly emphasis on “truth telling.” Insightful, and an otherwise scarce viewpoint.

Mad Money, or Stupid Listeners?

Why anyone would listen to financial advice from a television program host is beyond me. It’s comedy, not advice:

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.”

They don’t call it “mad” money for nothing.

Bear Stearns no longer

The Wall Street Journal calls it a rescue, but at roughly $2 per share I doubt anyone but the remaining prime brokerage clients and derivative counterparties are looking at it that way.

Monday the company was trading at $70 per share, which sounds more like a bloodbath.

In a short conversation this evening with a friend from the Street, he noted that this was downright ominous. 97% of the market value of the fifth (?) largest investment bank in the world disappeared into thin air in 144 hours. Who else is out there with such destructive off-balance sheet liabilities of a similar magnitude? And who is really left to “rescue” them?

…with the exception of the Fed (and maybe some tech companies that have zero debt and tens of billions of cash on hand)…?

Bear Stearns Sees Facebook Worth $5B-$6B

A Bear Stearns analyst pegs Facebook’s value at $5B-$6B. With revenue of $6 billion by 2016. Will Facebook even exist in 2016?