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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Peter V who wrote (111068)	3/17/2008 2:45:57 PM
From: Perspective	Respond to of 306849

So a $5 call will become like a $100 JPM call? Why are they still bid around $1? `BC

To: Peter V who wrote (111068)	3/17/2008 2:48:13 PM
From: TheStockFairy	Respond to of 306849

Well, 50% of 60 is 30. 50% of $4 is $2. It doesn't matter when you get in?

To: Peter V who wrote (111068)	3/17/2008 2:49:36 PM
From: Peter V	Read Replies (2) \| Respond to of 306849

Bear stock price suggests shareholders may hold out for more Marketwatch - March 17, 2008 2:43 PM ET SAN FRANCISCO (MarketWatch) -- During a Sunday conference call held by JPMorgan Chase & Co. to discuss its offer to buy Bear Stearns Cos., an individual investor in the beleaguered brokerage firm announced that he would vote against the fire-sale deal. The comment by a person identifying himself as Brian Firestone was followed by a brief silence. Then J.P. Morgan (JPM) executives moved on to the next person on the call. But the prospect that Bear Stearns investors may reject the bank's offer of $2 a share -- at least for a few months -- is now being priced into the market, analysts said Monday. J.P. Morgan's offer is worth more than $2 a share because the bank's stock (the currency it's using to try to purchase Bear) climbed more than 7% Monday. Bear shares changed hands for $4.10 during afternoon trading -- almost double the value of the bid. "People are speculating that shareholders aren't going to approve the deal for a while," said Ryan Lentell, an equity analyst at Morningstar, in an interview. "If market conditions improve, they may be able to negotiate for a higher price or another bidder may come to the table." As part of the deal, J.P. Morgan immediately guaranteed all of Bear Stearns' (BSC) trading obligations to try to encourage counterparties and clients to keep trading with the firm. That guarantee remains in place until the acquisition closes and Bear is subsumed into J.P. Morgan's operations. However, if Bear shareholders reject the deal, they have to vote on it several more times over the next 12 months. During that time, the guarantee from J.P. Morgan remains in place, executives from the bank indicated Sunday. "The guarantee applies to all transactions on the books today and any transactions that are entered into while that guarantee is in place," Bill Winters, co-chief executive of J.P. Morgan's investment bank, said during the Sunday conference call. "We all firmly believe that the shareholders at Bear Stearns will approve the transaction," added Steve Black, who runs J.P. Morgan's investment bank with Winters. "If they were to choose not to approve it, then the guarantee would eventually go away when that process has run its course, which is over the course of 12 months." Bear shareholders may be thinking that if they vote the deal down for several months, markets may calm down and the value of the brokerage firm may recover, leaving them room to ask for more money from J.P. Morgan, Morningstar's Lentell said. In the meantime, J.P. Morgan's guaranty remains in place for as long as a year. This strategy also increases that chance that another bidder may appear later on, he elaborated. "You wouldn't get another bidder until the markets recover," he commented. Bear Stearns shares were down 86% at $4.10 during afternoon trading on Monday. J.P. Morgan shares climbed 8% to $39.45.