I agree Bear is dead What BS now is just a zombie there is no chance for them Building is sold, positions are being closed, clients moved somewhere else Noone will ever make a single trade with them What value it has now? Zero And if no bail out shareholders would get nothing anyway They buy it for 2 just because 0.01 would look a little bit stupid Of course, it sucks when you lost 1 billion And it's natural to be in denial for some time And the last - do you really think you can trick Fed, JPM and all other? Why do you think BSC shareholders will?
How do you rule out beyond a reasonable doubt that Lewis conspires with other shareholders and manages to shore up a couple of Asians or Arab investors that will pay more than $5? You can't.
there are two problems 1. What value does the company have now? 2. Are there any crazy Asians and Arabs who would agree to buy if Fed says Bear goes to JPM?
11:40 BSC Bear Stearns: Additional Market Chatter (7.51 +2.70) -Update- Additional chatter in BSC that bondholders are buying stock up to these levels so they can own enough equity to vote the deal through. $150b in face bonds vs $600mm in market cap in order to save billions in bond value. Recall 9% holder Joe Lewis threatening to vote down the deal. Briefing Trader. Here. I'll give them a free plug
I am not saying there is a 100% guarantee there will be a higher rival bid for BSC. I am just saying as with everything in the markets nothing is set in stone. IMO this whole deal smells like something activist investors could well love to take apart.
actually that might be true. According to reports Lewis still has 1 Bn left. So he might be in a such tilt so he is trying to buy the entire BSC using his IB TWS
Based on today's trading, the risk was that you lost $3.50 per share within 4 hours, with a 100% probability.
If you want to play the downside of BSC buy puts. Then you have limited loss if something drastically changes. I would recommend that you stay away from being short the stock.