NEW YORK — One of the biggest corporate casualties of the global credit crisis, Bear Stearns Cos., is about to vanish into history.
The company that was brought to the verge of bankruptcy amid heavy mortgage-related losses is expected to become part of JPMorgan Chase & Co. after a vote today by Bear Stearns shareholders.
But while the vote will seal the buyout deal brokered by the Federal Reserve, the debate about the 85-year-old company’s demise will continue as analysts, academics and politicians try to decide exactly what went wrong.
“The second-guessing will be enormous,” said Richard X. Bove, a financial strategist with Ladenburg Thalmann.
Shareholders are being asked to approve a deal to buy Bear Stearns at $10 a share — a paltry amount considering that the stock was worth almost $154 one year ago. With JPMorgan already controlling a 49.5 percent stake in Bear Stearns, the buyout is all but guaranteed; the acquisition is expected to close over the weekend.
Bear Stearns began to unravel last year when two hedge funds it managed imploded because of heavy bets on subprime-mortgage securities. Along with other big investment banks, it was forced to take $2.75 billion in write-downs for soured investments on subprime-mortgage-backed securities. Then rumors in mid-March about the company’s cash position triggered a run on the investment bank that left it close to bankruptcy.
Bove and other analysts believe the Fed’s direct intervention, persuading JPMorgan to buy Bear Stearns, will be the most discussed issue going forward.
