Thursday's Rumor: Bear Goes Belly Up (Who's Next?)

A few years ago -- around 2001-02 -- I had strongly recommended Bear Stearns (BSC).

They had a great franchise, they had lagged the rest of the banking sector for no apparent reason, and overall, the quality of management under Ace Greenberg seemed to be terrific. The stock was $54-57.

Subsequently, Bear ran to $170+. I have long since been gone from the stock.

Thursday, we witnessed it complete the round trip as it careened through that $54-57 range. At one point Thursday, Bear was down $10, on a rumor that they were going to go belly up.

I have no opinion or special insight as to the truth of that . . . Hey, it could happen, it really wouldn't surprise me, but I don't know, and we have no position in BSC.

But that rumor raises a more interesting question: What companies could take the long dirt nap? Who out there is ripe to be absorbed, merged, taken over (hostile or not). There has to be a long list of mortally wounded firms out there that simply haven't keeled over yet. What CEOs are dead men walking? What stocks are waiting to be euthanasized?

~~~

What say ye?

(I want names and stock symbols!)

Comments

[Robster:]

Bear Stearns (BSC) is still a great institution and at these prices would look compelling for a bulge bracket bank such as Wachovia or Wells Fargo.

2008 Mar 14 05:34 AM

[James Cullen:]

I think Wells Fargo is far too smart/conservative to take a gamble on Bear.

2008 Mar 14 07:55 AM

[jimmyt:]

Just went long a bit 'o the Bear at 33. More downside risk in points, but to me higher probability that they remain a viable institution. We'll know in a few hours - to some degree

2008 Mar 14 10:30 AM

[Robster:]

scratch earlier comment. agree with james.

2008 Mar 14 12:29 PM

[dkhkch:]

Went Long the Bear at $29.90. We'll see if I am a genius or a complete idiot???

2008 Mar 15 08:35 AM

[Gaucho:]

YOUR an IDIOT. Second opinion your stupid to grab a falling knife.

2008 Mar 15 06:54 PM

[Lexy:]

The emergency funding, i.e credit extensions, by JP Morgan Chase (and backed by the Fed) only buys BSC a little time...28 days to be exact. With other financials due to report soon, there is a somber mood on the street, and my gut instinct says the carnage will be bigger than expected which will drag this sector down further with BSC in tow. Beware Lehman Bros.

2008 Mar 16 02:19 AM

[User 164446:]

You make it sound like the Federal Reserve act like "Heros". Where was Greenspan when the Subprime desaster hit the street? Absent as usual, with severe memory loss. He didn't see it coming, only ruined millions of fixed income citizens whit 0% lending procedures, giving housing to somebody who could'nt affort a bicycle. Suddenly we must bail out Wallstreet. Sent Greenspan to Jail.Let them go bancrupt like everybody else. Very soon, the almighty Dollar isn't worth the paper it is printed on, like Germany 1923,1945, Italy forever and a few others! Today, we are the laughing stock of the World. K H K

2008 Mar 16 07:03 PM

[Kenny G:]

too late to post new comment. however, still want to thanks for your topics. :)

Feb 04 02:47 AM