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Author Topic: BSC Bear's shakeup / shakeout ?
Stockstar69
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Wow, Being bought for $2.00 yeaterday and today back over $6.00. What's to stop this from going to $10.00/$20.00 by the end of the week?
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Spectacles
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I'm actually thinking of buying a few just in case it does hiy 10 or so.
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PCola77
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In my opinion that would be a mistake. Too much downside and not enough upside.

I think the play on this one was the last two days, and from here out it's too dangerous.

Good luck to you though.

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Spectacles
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Thanks for the input PCola,,,I'm not going in at 6+,,decided it was too rich for my blood,,I'm actually waiting for TMA to touch the low 2's (maybe?) and I'll jump in there.
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Jo4321
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Interesting.....


Bear debt holders may be buying shares to try to sway deal vote
6:41 p.m. 03/18/2008 By Alistair Barr Provided by


Bond investors may be buying Bear shares to vote for J.P. Morgan acquisition
SAN FRANCISCO (MarketWatch) -- Bear Stearns debt holders are so keen on the J.P. Morgan Chase acquisition that they may be resorting to an extreme measure to ensure the deal goes through, analysts said on Tuesday.

Investors in the bonds and other debt of the beleaguered broker may be snapping up shares of the firm. As shareholders, they'll be able to vote for the deal, giving it a better chance of closing.

Bear shares jumped 23% to $5.91 on Tuesday. That's considerably more than double J.P. Morgan's offer price, which stood at $2.34 a share at the close of trading on Tuesday.

Bear shareholders, shocked by the sudden drop in the value of the firm's stock, may be considering voting against the deal, hoping that if credit markets calm down in coming months they can extract a higher offer from J.P. Morgan or woo another bidder.

But if rival bidder doesn't materialize and J.P. Morgan (JPM) stands firm, the alternative may be bankruptcy for Bear. That may be the worst outcome for debt holders. Buying Bear shares, even at elevated levels, to vote for the current deal, may be worthwhile to avoid that messy outcome, according to some analysts.

"Bear debt holders may be buying Bear shares to ensure that the proposed transaction, which is favorable from their perspective as compared to a standalone Bear, closes," Chris Young, head of M&A at RiskMetrics, said in a note to clients on Tuesday.

"I have heard that rumor too. It reflects the desire of bondholders to see the deal go through," Kathleen Shanley, an analyst at Gimme Credit LLC, said. "That's certainly the preferred solution for the bondholders."

J.P. Morgan has guaranteed all of Bear's (BSC) trading obligations, but the giant bank is not guaranteeing the firm's debt.

While unsecured Bear bondholders didn't get a guarantee from J.P. Morgan, the bank stressed that it plans to acquire and assume the firm's entire capital structure, David Hendler, an analyst at CreditSights, wrote in a note to clients on Monday.

"Bear bondholders should receive at a minimum implicit J.P. Morgan support if/when the deal closes," he explained.

But it may be difficult for bond holders to buy enough Bear shares to influence the vote, Shanley noted.

"The stock is widely held by employees and there are a number of large shareholders of record too," she said in an interview.

However, Bear shares have traded heavily since the J.P. Morgan bailout was announced on Sunday evening, suggesting the firm's investor base may be changing rapidly.

"Extremely high trading volume since announcement implies a significant change in the

company's shareholder base, with a likely shift to shorter-term traders from longer-term

investors," Young said.

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"Great Day for Up!"....Dr. Seuss

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Stockstar69
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Hmmm, that was my thoughts but it's nice to see it in print. We could be headed back up MUCH HIGHER. Like I said, I don't think $20.00 is out of the question.
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Jo4321
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.
Well,

This article seems to be saying that the deal will be better than $2.00 a share.

quote:
While it's unlikely that another suitor such as HSBC(HBC - Cramer's Take - Stockpickr) or private equity shop Kohlberg Kravis Roberts will swoop in, as the New York Post has reported, it's almost certain that a sweetened offer from JPMorgan, led by CEO Jamie Dimon, will be put on the table, the source says.

The rationale for increasing the deal is that Dimon wants to appease angered investor groups and employees and score approval for the deal, rather than see it stalled in protracted talks. Bear's headquarters alone are said to be worth approximately $8 share and the Federal Reserve is posting a $30 billion backstop against mortgage securities held in Bear's Tier 1 bucket, where many hard-to-value securities have been placed. So increasing the price comes at little risk to JPMorgan, the official notes.



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TimW
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BSC is very interesting. Theres so many people out there saying JP "bought them" but nothing has happened yet. Theres also verified insiders saying they are voting against it.

Who knows what its really worth, but even if all their assetts are flopping in this bad realestate market, they are still at least 25% value at very minimum. That means the company should still easily be worth $25 compared to its previous 100.

I bought up a bunch at 5.06 just to see what happens. I figure i've made stupider bets in the past, and I dont think JP Morgan would have went up several billion in market cap on the news of acquiring a "200 million company". JPM has gone from 38 to 44.. thats ALOT of $$. They also had a run that retraced a great deal on the same day BSC had a dip and ALOT of green ticks. It could possibly be reversal.

We are missing alot of pieces to the puzzle, and that makes me wanna buy.

*just did something crazy*

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TimW
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Oh yeah, dont buy because i did, i lose alot of money. "Jo Effect" times ten here. Im just hoping for a wild shot that BSC gets a realistic offer from another place, perhaps even a big individual investor that wants to help the economy.

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Buy high, sell higher.

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PCola77
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On what do you base that they are worth 25% at minimum? Is that just your guess or something like an article that you can post or something?
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TimW
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Mortgage backed securities.. Even if they hold tons of mortgages at 400k a piece, theres no way if liquidated that property would sell for less than 100k is what im meaning by that. still considered illiquid./fixed, but its still money none the less.

Just from looking at alot of other companies financial reports where they are writing off loans, most are getting 50% ish.

Id still like to see the report on where their 266 billion in cash they had in November went. [Frown]

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glassman
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the play here is a hedge for bondholders.

Holders of the more than $300 billion in Bear Stearns bonds, in the meantime, are purchasing Bear stock to strengthen their hand in voting for the deal, thus guaranteeing that their bond investments will retain the backing of JPMorgan and its guarantor, the Federal Reserve Bank of New York.

if you are buying to hold? you are likely to end up getting 2$.

the bondholders have alot more to lose than anybody else, and sooner or later whoever is buying against them will run outa cash.

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Bob Frey
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Bear Stearns Shares Jump on Bid Report:

http://us.rd.yahoo.com/finance/finhome/topstories/apf;_ylt=AvOqIAeVG75ioSoYaLtQ9 1G7YWsA/*http://biz.yahoo.com/ap/080324/jpmorgan_bear_stearns.html

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PCola77
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Wish i had bougth in at $2 [Smile]
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glassman
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yeah me too.

i wonder where they "found" the other 8$ in assets? [Big Grin]

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PCola77
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Hit over $13 a few minutes ago!
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glassman
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FED to loan JP/Bear 29 billion$ at 2.5%? sheesh. where do i get a loan like that?

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Stockstar69
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quote:
Originally posted by Stockstar69:
Hmmm, that was my thoughts but it's nice to see it in print. We could be headed back up MUCH HIGHER. Like I said, I don't think $20.00 is out of the question.

? to da moon! ?
[Were Up]

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PCola77
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Did you get in Stockstar?
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bilgert
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5 and 10 dollar calls were dirt cheap the day this plummeted. I tried to buy, but my account hadn't been approved for options at that time.

Man, I am kinda bitter.

NEXT!

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Stockstar69
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quote:
Originally posted by PCola77:
Did you get in Stockstar?

Yes just a little as I'm cash strapped and hate selling my stocks low when I truly feel they will go higher.

I bought shares around $2.75 last week on the initial open after the buyout news and bought more today at $11.70.

Now I would not be surprised to see it got to $20.00ish.

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Stockstar69
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Looking at an end of day run to $13.00.

and there off!

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TimW
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Guess im not so stupid now for buying up at 5.06 now arent I [Razz]

Guess I just need to sell CSHD this year to cover the BSC wins.

Hooray!!!!

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Buy high, sell higher.

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PCola77
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Don't think anyone thought you were stupid, but I still think you did something crazy. Paid off for you though [Smile]
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TimW
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I called myself stupid [Smile] Over and over. Just got lucky, once. lol.

I had a dream that buffett announced he offered and paid $33 / share the other night.

So if that comes true, then, then its really crazy.

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PCola77
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LOL. For your sake, I hope he does [Smile]
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T e x
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great stuff here...

a goal for those who hope/plan to trade for a living--when you're sitting there, all day...and these pop up?

Bang...ticket to ride

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Nashoba Holba Chepulechi
Adventures in microcapitalism...

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PCola77
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I didn't get in Bear at all, but two days last wek played NCC from just under $7 at around 3PM to $8.50 the next day pre-market (so about 1 hour of market time), and CCOW from $3.96 just before the close to $4.64 within minutes of the open the next day. (Pay no attention to the fact that it hit $9.00 today...)

Made a few thousand bucks in a total of like 1 hour of trading time. Rarely happens, but like you said, if you understand what's going on, and have the money, you can do real well, real fast. Heopfully I have a few more weks like that one soon [Smile]

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T e x
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ya...CCOW good, too. More esoteric, if you will--if you're watching every day, BSC practically a gimme, a bird's nest on the ground...

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Nashoba Holba Chepulechi
Adventures in microcapitalism...

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Stockstar69
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quote:
Originally posted by TimW:
I called myself stupid [Smile] Over and over. Just got lucky, once. lol.

I had a dream that buffett announced he offered and paid $33 / share the other night.

So if that comes true, then, then its really crazy.

Funny but stranger things have happenned. Maybe they will discover billions in collaterallized bonds in the BSC vaults that were not being reported since they aren't mature. Hmmm.

Good luck to all of us on this ride.
[Good Luck] [Good Luck]

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Stockstar69
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$65.00 per share? Looks at this.

http://www.foxbusiness.com/article/analyst-jpmorgan-pay-65-share-bear-stearns_53 0376_1.html

I carrumba!

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PCola77
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It's "Aye", not "I", for future reference.
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PCola77
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By the way, did you even read the article? It says it will COST them $65 per share after all is said and done (because of all the extra costs involved aside from the share purchase). You'd still only get $10 per share.

quote:
Originally posted by Stockstar69:
$65.00 per share? Looks at this.

http://www.foxbusiness.com/article/analyst-jpmorgan-pay-65-share-bear-stearns_53 0376_1.html

I carrumba!


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TimW
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quote:
Originally posted by Stockstar69:

Funny but stranger things have happenned. Maybe they will discover billions in collaterallized bonds in the BSC vaults that were not being reported since they aren't mature. Hmmm.

Good luck to all of us on this ride.
[Good Luck] [Good Luck]
Maybe they have billions more that CSHD has been managing in EuroBonds. [Were Up]

Haha, sorry, couldn't resist.

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Stockstar69
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Funny, Now BSC and CSHD are talked about in the same sentence.

ROTFLMAO

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