Where's Bear Sterns now?

FlayJot answered 7 months ago …

Bear Sterns is still being traded on the market, at a price slightly above the buyout price agreed upon between the firm's board and JP Morgan. The deal is a stock deal, so as JPM goes up, so will BSC (and vice versa) That being said there's still a premium on BSC at the moment. Reasons for the premium are probably related to two things:

- speculation the deal could be rejected by shareholders and in turn an increased bid from JPM
and
- short-sellers covering their positions.

The first scenario is extremely speculative, and it would appear unlikely...if shareholders reject the deal the company would be bankrupt and shareholders would get nothing.

The second seems more likely and thus represents false demand.

It would seem a very precarious investment to make at this point.