TALK BACK: Good Call On Bear Deal Nabs Monthly Contest Award
Apr 1, 2008 10:05:06 (ET)
Dow Jones NewsPlus asked readers if investors should accept JPMorgan Chase & Co.'s (JPM) offer to buy Bear Stearns Cos. (BSC) for $2 a share and the response was a resounding no.
Readers were outraged the Federal Reserve would allow JPMorgan to take over the storied Wall Street brokerage for a fraction of its closing price from the previous trading session while guaranteeing the brokerage's risky debt portfolio.
Many called for shareholders to reject the deal and allow the company to fall into bankruptcy or better yet allow the firm to rise from the ashes, should the Fed be willing to accept their mortgage securities for collateral as they started doing for other brokers.
But Gerry Graphia, a Bear Stearns shareholder in Houston, took a somewhat more pragmatic approach. While he, too, was firmly against the offer, he wasn't looking for a return to the long-gone days of $170 a share, or even $30 a share, its closing price the previous Friday. On Wednesday, March 19, he said the bank could easily command $10 to 12 a share. The next Monday, JPMorgan agreed to raise its offer to $10 a share.
For his prescience, Graphia's Talk Back comment was named the Editors' Choice for March, and he wins a Dow Jones Newswires' pullover fleece. We are looking forward to hearing from you. Keep your comments coming. Read Graphia's post:
I would vote no to the Bear Stearns offer from JPMorgan of $2 per share.
I believe that it is an absolute joke. Bear Stearns is nearly a 100-year-old company and carries a lot of weight.
JPMorgan is trying to take advantage of a situation.
I would vote no to the offer, participate in litigation and do whatever it takes to raise the share price to a reasonable level.
This stock should be easily priced at the $10 to $12 range.
(TALK BACK comments may well be submitted by readers who have a financial interest in the securities that are being discussed.)
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(END) Dow Jones Newswires
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