< Return to Bulls page

Bear Stearns and Washington Mutual Acquisitions

Acquisitions: JPMorgan (JPM) is only paying $10/share for Bear Stearns stock. This is the same company that was trading north of $150/share a year ago and was still being sold for more than $50/ share on Friday morning - the same day that Bear Stearns was telling analysts that its book value is $80/share.

If that's true, JPMorgan is getting a hell of a deal. For under $250M they are buying an 85 year old company with oodles of relationships. Yes, it has has $33B of total mortgage-related holdings, but even if all that exposure goes bad and the book value of $80/share is reasonably tangible, they still come out way ahead. And what if things are worse than everybody expects? Well, the Federal government is making this transaction virtually risk free for JPM by guaranteeing it!

JPM acquired Washington Mutual and has worked to close down 57 branches in the Chicago area. They also have been working to trim down WaMu and make its assets more profitable.

Furthermore, the acquisition of Bank of New York's retail and small business banking network has improved JPMorgan Chase's competitiveness in the New York/New Jersey region and increased Chase's consumer base and deposits.

Wikinvest © 2006, 2007, 2008, 2009. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.