The Real Message Behind the Bailouts Written By: Jeanne Roberts 2008-09-17 12:54:23 Photo: wallyg, Creative Commons, Flickr
There’s a message behind the recent bailouts, but it isn’t what you think.
U.S. Investment Banks Enjoy High IPO Fees Written By: David Neubert 2007-03-27 14:00:17 Sarbanes-Oxley, a draconian visa application process, in addition to relatively low valuations and higher interest rates, aren't the only things making U.S. capital markets less attractive to foreign issuers of IPO's; a cartel that keeps IPO fees high is also part of the problem.
Why is Bear Stearns Trading Above Deal Price? Written By: David Neubert 2008-03-18 11:05:52 I've been getting the inside scoop from some hedgefund traders (who always request to remain anonymous). One told me that the reason Bear Stearns (BSC - $7.90) is trading so far above the deal price with JP Morgan (JPM - $41.00) is that bond holders who NEED the deal to go through are buying millions in equity to save their billions in debt. The will eat the difference between where they buy the equity and $2.00 in order to protect much higher numbers in debt. Also, the equity acts as a nice hedge. If the deal does not go through, Bear Stearns equity will go up a lot and the bonds will go down.
Lesson in hedge fund thinking: Equity up? The bank is being sold cheap at the expense of equity holders to protect bondholders. No deal means the equity can trade up speculation that another buyer with more time to analyze the company will pay up. Bonds Down? If JP Morgan walks away from its government subsidized guarantee, bonds fall.
