19th
2008
Bear Stern’s Stock Price?
(Stock Symbol: BSC)
Ok, I’m not claiming to be an expert on the stock market, far from it, but I have done my fair share of research and dabbling. Now this is kinda upsetting to me, as you all probably know JP Morgan has very publicly offered a buyout of Bear Stern’s for $2 a share (the buyout was approved by the government I believe) and is awaiting shareholder approval. The thing is after this was announced the stock price shot up to as high ass $8 and his since settled around $6.
I even saw an article suggesting that JP Morgan may be paying too much for it. So i guess my question is does anyone know why someone would buy a stock at $6 or even $8 when it is going to be sold to another company at a value or $2.
The best I can come up with is people selling short, but will that influence a stock price to go up 400%, I guess anything is possible in the crazy economy.
Mar 19th, 2008 at 1:08 pm
Its hard to say really. I was playing Delphi (DPHIQ.pk) 9 months ago, which is clearly a bankrupt stock. The thing is the stocks action was almost irrelevant with news on the stock. Good news and the stock went down, bad news and the stock went up. It was revealed that the investors would not come away with anything when the company emerged from bankruptcy. Even knowing this people continue to trade on the stock. Today alone Delphi has nearly 1mil in volume.
One suggestion, On the TV show Mad Money, it was recommended that you hold onto Bear Sterns. A lot of people might have placed orders that weren’t filled on Friday and they ended up being filled at inflated prices on Monday. Just an idea.
Mar 19th, 2008 at 1:13 pm
Yeah mad money is another issue of mine, I commend Jim Kramer for his past track record of picking stocks (he has made many millions and heads up a large hedge fund) however it is alittle alarming that within a day of being mentioned on his program (mad money) a stocks value can have such a large fluctuation in value (this is partially due to the shows audience which I would assume is quite large). Anyway just some food for thought I actually like him and think he is dynamic and a breath of fresh air when compared to the regular boring financial analysts. Speaking of food back to my chinese
Mar 19th, 2008 at 4:55 pm
Another example of a buyout spike is Yahoo (YHOO). They were trading in the low 20’s before Microsoft offered to buy Yahoo @ $31/share. The stock price very quickly rose to $30 and eventually rose as high as $34.
Mar 20th, 2008 at 9:25 am
That makes somewhat more sense cause the stock rose to around the buyout price, anyway after speaking with my uncle (not uncle john) about this he brought up a valid point, this buyout has not been approved by the shareholders yet, so in fact it is still possible to get another buyout offer since the stock is higher or for JP Morgan to increase their offer because of an inflated stock price. Either way the stock price is still a joke considering it was $140 or so last year .02
Mar 20th, 2008 at 10:48 am
Given their financial state and the current condition of the markets, shareholder approval is a formality. Especially considering the fed is on board.
Mar 24th, 2008 at 12:12 pm
Dave,
I Figured you might be interested to know the buyout offer has been increased to $10 a share.
money.cnn.com
Mar 24th, 2008 at 12:23 pm
yeah i saw that and the stock is trading at over $13 right now, makes me wish i would have bought some last week at 6, ohh well hind sight is always 20/20