Bear Stearns employees owned over 30% of stock

[babylonsister]

Aftershocks of a Collapse, With a Bank at the Epicenter
Mark Lennihan/Associated Press

By LANDON THOMAS Jr.
Published: March 18, 2008


The shouts, hoarse and high-pitched, rang out in the cavernous boardroom late Sunday at Bear Stearns’s headquarters on Madison Avenue. Alan D. Schwartz, the chief executive of Bear Stearns, was briefing top executives on the deal he had just struck under duress with JPMorgan Chase and the Federal Reserve Bank of New York: their stock in Bear was now worth $2 a share.

Just like that, some people’s stakes of $100 million or more in Bear were ravaged, and senior executives like Thomas A. Marano, the head of mortgages, and Bruce Lisman, a co-head of equities, were furious. Entering the weekend, Bear executives felt confident that the firm could be sold for several billion dollars, if not more.

But $236 million — how could Bear have sold for such a price? Why didn’t the firm seek financial help earlier, they and others asked, as they grilled Mr. Schwartz and his chief financial officer, Samuel L. Molinaro Jr., according to people who were briefed on the meeting.

For these men, and many others like them who have spent most of their professional lives at Bear, the sudden collapse was unfathomable.

More so than other firms on Wall Street, Bear had encouraged its employees, from secretaries to top executives, to be long-term holders in the company’s stock, and the employees own over 30 percent of the company.

more...

http://www.nytimes.com/2008/03/18/business/18bear.html?adxnnl=1&ref=business&adxnnlx=1205845664-8zcJJAGhkJfrnjhkzR3GtQ

[ThomWV]

1. Sucks to be a broke rich guy,

[Virginia Dare]

3. Well, now they're going to get a government handout..

so it's all working out very well for them...:P

[ThomWV]

11. Funny how that worked out

They cut the deal on sunday, I am told. Apparently we, the taxpayers, put up the money for them to be bought out for $2.00 a share. Yesterday morning when I looked it up the stock was selling for $1.84 a share. Go figgure ....

[JDPriestly]

14. Can someone please explain.

If the government is handing out all that money to save the mortgage investment firms that made bad loans and the vulture banks that became their successors by buying obviously bad loans, why is Bear Stearns being sold for $2-- a share? As long as the government is bailing out poorly managed businesses, why isn't some of the money going to bail out Bear Stearns investors? Why the preferential treatment for other companies?

Is it because 30% of the investors in Bear Stearns were employees?

And if the banks -- run by professionals who were claimed to know what they were doing -- are being bailed out, why aren't individual homeowners who weren't experts and didn't know what they were doing or at least as much about what they were doing being bailed out?

Is the bail out just for the high and mighty in Bush's social class? Are the wealthy Republicans, Bush's base as he calls them, being bailed out at the cost of the rest of the country?

And if the Bear Stearns employees are being left out to hang and dry, what is going to happen to those of us who have small amounts in 401(K)s? Who is lobbying for us? I have this funny feeling that the teachers' pension funds and us little guys without any pension other than our IRAs and 401(K)s are going to be treated just like the people who bought houses with bad mortgages. Am I just being paranoid or am I on to something?

[babylonsister]

6. This included the peons, too. It does suck for some of them, some

I have no sympathy for. And 7,000 pink slips are supposedly going out.

[MeDeMax]

8. 9,000 pink slips if I remember correctly -- n/t

[WolverineDG]

2. Sounds like Enron Part II nt

[babylonsister]

5. My thoughts exactly! nt

[izquierdista]

4. He shall reap what he hath sown

:nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity:

[MeDeMax]

7. why do you think the investment pundits tell people

to be long term investers ? so you will keep afloat their day-trading and profit-taking activities.

Does anyone out there actually believe the earnings reported this morning by Lehman / Meryl / Goldman ? If these companies are in trouble, do you think they will be allowed to come out and tell the truth ?

Since the white house is handing out free candy on wall street, each of those banks is yelling "trick or treat" ?

[melm00se]

9. Enron part II

is right...but I have little pity for those who chose to put all their eggs in one basket...Enron should have taught folks the dangers of that.

Now the old adage "beggars can't be choosers"....might the company have been sold for more? maybe or it could have nose dived even further to the point of bankruptcy.

[JDPriestly]

15. Hey! You have little pity. Read the history of the 1929

stock market crash. We're all in this one together. There will be no winners when this thing is over. There will be survivors, but they will survive by luck not by good judgment.

Read Fooled by Randomness. The Hidden Role of Chance in Life and in the Markets by Nassim Nicholas Talib

[melm00se]

17. in this case?

No. These are people who are working for a major league investment bank should have some modicum of financial smarts and should know better. Enron was a perfect case study of what not to do and ignore the lessons those lessons at your own peril, they did, got greedy and got bit.

[Auggie]

10. Hard to believe employees didn't see this coming

All one had to do is look at the numbers.

Former BS chairman Alan Greenberg sold over $50 million worth of shares starting in 2007.

[lazer47]

13. Is that "BS" Bull Shit chairman or Bear Stearns chairman???

[Auggie]

16. Bear Stearns, though I guess either would suffice

[RUMMYisFROSTED]

12. Bear Stearns will be fine.

http://www.youtube.com/watch?v=gUkbdjetlY8