2008-03-18 — bloomberg.com
``It's likely that a somewhat higher bid will emerge,'' said John Dorfman, chief investment officer of Boston-based Thunderstorm Capital, which owned more than 100,000 Bear Stearns shares as of Dec. 31 and opposes the deal. ``At a price of $2, it's better to just hold on to the stock as a kind of option, hoping for another offer.
Yeah; those $30B in Fed guarantees, along with the $1B estimated value of Bear's HQ building, have to be worth more than $2 a share (or approx. ~$240M total). Of course, that is, assuming that Bear's derivatives exposure on $13 trillion doesn't end up being more than $31B. Ahem.
Then there's also the little point that Bear must have been JP's counterparty for some unknown quantity of these derivaties, meaning that on all those contracts, JP is now self-insuring. Is the Fed's backstop enough? $30B is a lot lower than $13,000B.
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