The reason the Bear Stearns news has caused such shock (and in some quarters) outrage: it didn't declare bankruptcy. If it had, the whole mess would've been easy to conceptualize. Liquidity dries up, they can't do business, and voila. Bankrupt. Stock goes to $.10 and then slides to $.0. Ugly and depressing for Bear shareholders, but again, easy to understand.
But this whole thing of selling for $2 is just weird. It's still alive operating, yet selling for a song. That's hard to wrap your mind around. What about the building? What about the $80 per share in book value? What about the value of the culture, people, operations, etc? If they're worth something, then why just $2 per share? These are all rhetorical questions: my hunch is that the price is probably right -- I'm not assuming a nefarious conspiracy of the Fed, JPM and Bear seniors. If they could've done better for shareholders, they probably would've. But from an outsiders perspective, not really having gotten a good look at the Bear balance sheet, the whole thing is hard to conceptualize. A clean failure, while worse for shareholders and employees, might've been easier to swallow.
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