Shares of beleaguered Bear Stearns Cos. Inc. plunged in premarket trading Monday after the investment bank struck an emergency sale deal with JPMorgan Chase & Co. _ but the stock was still above the deal's offer price.
Bear Stearns shares fell 89 percent to $3.20 in premarket trading from a $30 close Friday. But that was double the $2-per-share value of the JPMorgan offer, which was based on JPMorgan's stock price at Friday's close.
The deep discount was seen as Bear Stearns' only alternative to bankruptcy given its dire straits, which forced the investment bank to seek help from the Federal Reserve late last week. But there was heavy speculation that Bear Stearns employees, who own a substantial chunk of the firm, might oppose the deal because of the discount.
"We suspect that many (Bear) shareholders will be disappointed with the outcome, and while we believe an approval is the more likely outcome, we do not believe it is incomprehensible that this deal may have bought (Bear) additional time to assess its situation which may lead shareholders to reject the offer," Sandler O'Neill & Partners analyst Jeff Harte said in a client note.
Other investment banks were sharply lower as well, led by Lehman Brothers, which shed as much as 30 percent of its value.
