Bear Stearns Collapse: $159/share to $2 in 365 Days

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There is a ton of buzz out there today about the collapse of Bear Stearns.

Some may be asking, “What is a Bear Stearns?”

From their web page:

The Bear Stearns Companies Inc. (NYSE: BSC) is the parent company of Bear, Stearns & Co. Inc., a leading global investment banking, securities trading and brokerage firm.

From MSN Money:

Bear Stearns “is an investment banking, securities and derivatives trading, clearance and brokerage firm serving corporations, governments, institutional and individual investors globally. The segments of the Company are capital markets, global clearing services and wealth management.”

What happened? This article explores it well. (Hat tip to Shailesh)

I’m a visual learning sort of guy. Here in all its gore is a Bear Stearns stock chart from the last 12 months:

BSC 1 year 

It’s sort of hard to see that plunge at the end, so here is a 5 day chart:

BSC 5 day

Yak.

High last Tuesday = $68.08/share.

Today’s price? Opened at $3.17/share and is currently at $4.12.

52 week high? $159.36….

Wow.

27,056 news articles from a news search for “Bear Stearns”.

Techonrati Blog Search for Bear Stearns (31,560 results. 100 in last 39 minutes..).

Google Blog Search for “Bear Stearns” (661,908 results)

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[tags]Bear Stearns, BSC, Avoid high buildings[/tags] 

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About the Author
Jay Thompson

I'm a real estate broker in Phoenix, Arizona and the publisher of the Phoenix Real Estate Guy blog. I tend to drive too fast and scream at the University of Texas and Denver Broncos football teams. My two kids are smarter than most adults I know and my wife is simply amazing.

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  1. Wow that is a pretty big drop. I guess now is the time to buy it. I wonder if it will ever go back up. That is a huge downfall for a company, almost like a punch in the face for the shareholders.

  2. Jayson says:

    That's just amazing. I wonder how many millionaires need jobs tomorrow. What do you think Jay, is it a good time to buy the stock and sit on it?

  3. I'm the last person you want stock advice from Jayson. You're looking at a guy who bought an ISP stock in the "dot com" craze for $6/share, watched it rise to $80 (after splitting 2:1) and then sat there while it fell to $0.20. I did manage to pull out enough to cover my investment and a little more, but not nearly what I could have done.

    Given that JP Morgan is buying BSC at $2/share, getting in now doesn't seem prudent. (It closed at $4.81 today, "on optimism another buyer may emerge")

  4. As astonishing as those numbers are, there is one particular British Investor that had a 9.7% stake in the company and lost over $800 millions in the deal. OMG

  5. Realtor Website Desi says:

    Interesting post and informative about this company.

  6. Athol Kay says:

    What a mess. The whole thing was done with smoke and mirrors apparently. One wonders if federal investigitions will happen at some point.

  7. $800 Million. Ouch, that had to hurt. Hope someone removed all the sharp objects in the room (not intended to make light of this poor guy's trouble).

    Athol – have to believe someone will investigate….

  8. Manyof their employees were heavily invested the company stock! This should remind us all to not put all of our investments into one basket.

  9. Yes, many retirement funds were imploded in the past week thanks to the Bear Stearns debacle. But then again, many fortunes were made since Monday morning when the shares began trading at 3.20 and peaked today over $8 per share on news of a possible topping offer, then settling down just below $6 at end of day. The problem is that the fortunes that were lost were lost by people like your neighbor and your grandma. People who had a lot of BSC shares in their pension or retirement plan that they have allocate from their income over that past 20, 30, maybe even 50 years! And fortunes were made this week by institutions like hedge funds that have been around four years now, JP Morgan, institutions who invest when blood hits the streets, and some wealthy independent investors. Many of these hedge funds are holding a lot of Bear's debt in the form of bonds and they are actively bidding up the share price because the JP buyout is a way to save their arses. If the deal goes through, the bond holders are saved by JP Morgan taking on the debt and the equity holders are burned with $2 a share. These aren't your everyday folks for the most part that are behind the recent rise the in price the past two days. And if they are successful, we'll have a redistribution of wealth where the hedge funds that are holding the BSC debt get paid in full and the moms and pops take it on the chin for more than $10 Billion.

  10. It may have dropped but I'm sure it went up when they were lending to anybody with a heart beat at stated income and a desire for homeownership. I feel sorry for the employees who were misled to invest in the company. As for the administration of the company find this an inevitable event that they had to know was coming. Curious to see if they pulled there own stock in the company.

  11. I feel for the employees who invested in the company as well.

    I agree about investing in the company you work for is not a good thing. I had a company that use to sell this like it was the best thing and many "stepford wives" I use to call them followed the montra and I worry how they will fair when they retire.

  12. the should have never been in the mortgage business. yeh they still ana active wholesale operation…

  13. Rachael says:

    Down from $159 to $2, but then look at the ridiculous bounce back up after the fall.

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