Bove: Bear Will End Up Costing JPM $65 a Share
at 2008-03-28 02:17:22
Richard Bove said that when you add it all up, Bear will eventually cost JPMorgan Chase $65 a share.
While some may think that JPMorgan is getting Bear Stearns at a bargain price, "I do not," Bove said in a note to clients. "Bear Stearns is a deeply troubled company which would have no value if the Federal Reserve had not stepped in to bail it out."
JPMorgan does not need Bear Stearns mortgage operation, has a "much stronger investment banking business," and the Bear Stearns New York headquarters is "just another piece of Manhattan real estate that it must rid itself of," Bove said.
While JPMorgan Chase may want Bear Stearns' prime brokerage business, it is likely that the unit's best customers have already left for Goldman Sachs, he said.
Bove currently has a "Market Perform" rating and $44 price target on JPMorgan Chase. The target implies he expects shares to drop about 6 percent
JPMorgan Sweetens the Pot
at 2008-03-28 02:17:21
I won’t say I predicted it, but I did, in fact, predict it.
Yesterday, JPMorgan Chase (JPM) announced that it will increase its bid for Bear Stearns (BSC) from $2 a share to $10 a share.
Last Wednesday, I wrote.
I would say that the most likely outcome is that JP Morgan will sweeten the offer. To add some context, it’s really not that much for JPM. The company’s market value has already increased by $20 billion this week. The offer for Bear will cost JPM $236 million. What’s the big deal if it doubles or even triples the offer? Plus, it could win JPM some goodwill.
Actually, they quintupled it. Before you go thinking that a newfound spirit of generosity and altruism has broken out on Wall Street, I should remind you that self-interes
Federal Reserve Announces Emergency Release Of Butterflies
at 2008-03-28 02:17:21
The Onion Radio News is on the scene.
Goldman: $460 Billion More in Credit Losses
at 2008-03-28 02:17:21
From Bloomberg:
Wall Street banks, brokerages, and hedge funds may report $460 billion in credit losses from the collapse of the subprime mortgage market, or almost four times the amount already disclosed, according to Goldman Sachs Group Inc. Profits will continue to wane, other analysts said.
"There is light at the end of the tunnel, but it is still rather dim," Goldman analysts including New York-based Andrew Tilton said in a note to investors yesterday. They estimated that residential mortgage losses will account for half the total and commercial mortgages for as much as 20 percent.
Earnings and share prices at US financial institutions tumbled in the past year as fallout from the mortgage crisis spread to other markets. Demand for mortgage-backed securities evaporated, leading to the collapse of Bear Stearns Cos., once that marke
Goodbye Moto
at 2008-03-28 02:17:20
Instead of one big sucky company, we’ll now have two!
Motorola said Wednesday that it would split itself into two publicly traded companies as it struggles to boost its stock price and faces pressure from activist investor Carl C. Icahn.
Motorola said in a statement that it would separate its flagging cellphone unit from its broadband and mobility operations, which encompasses the servicing of wireless networks and the building of television set-top boxes. Motorola shareholders would receive stock in both companies.
“Creating two industry-leading companies will provide improved flexibility, more tailored capital structures, and increased management focus - as well as more targeted investment opportunities for our shareholders,” Gregory Q. Brown, Motorola’s chief executive, said in a statement.
Motorola said in January that it was cons
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