More Like This, Please.

2 comments March 17th, 2008at 08:37pm Posted by Eli

Consequences!

In a shocking deal reached on Sunday to save Bear Stearns, JPMorgan Chase agreed to pay a mere $2 a share to buy all of Bear — less than one-tenth the firm’s market price on Friday.

(…)

Reflecting Bear’s dire straits, JPMorgan agreed to pay only about $270 million in stock for the firm, which had run up big losses on investments linked to mortgages.

JPMorgan is buying Bear, which has 14,000 employees, for a third the price at which the smaller firm went public in 1985. Only a year ago, Bear’s shares sold for $170. The sale price includes Bear Stearns’s soaring Madison Avenue headquarters.

(…)

James E. Cayne, Bear Stearns’s former chief executive and one of its largest individual shareholders, will most likely walk away with a little more than $13.4 million, the value of his Bear stock holdings, according to James F. Redda & Associates. Those would have been worth $1.2 billion in January 2007, when Bear’s stock was trading at a $171.51….

Awesome. His company was reckless and stupid, and he actually paid a huge financial price for it. Of course, he’s probably still richer than God, but losing $1.2 billion in a little over a year is a pretty huge kick in the nuts. I wish all incompetent CEOs had to take this kind of hit.

(h/t Stoller)

Entry Filed under: Economy,Wankers

2 Comments

  • 1. Cujo359  |  March 18th, 2008 at 8:01 pm

    I could live the rest of my life on less than half of what on what Cayne walked away with. The interest on that sum alone is more than most folks make in a year.

    What’s sad about this is that this is what his take was reduced to. If there really was karma, he’d be reduced to working the rest of his life and then retiring on Social Security when he just couldn’t leave the house any more. That’s what some of his victims are probably looking at right now.

  • 2. Eli  |  March 18th, 2008 at 8:07 pm

    Too true. It’s mortifying and embarrassing for him, but in the end, he *still* gets to live like a king.

    I would love to see CEOs and top executives (especially the culpable ones) be held personally liable for their company’s losses – if the company goes bust, so do they.


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