Goldman Sachs, which announced this morning that it made $1.5 billion last quarter, has quietly been telling some employees to prepare for another round of layoffs. The job cuts are scheduled for mid-April, and will include some senior positions which have not been large cash generators, according to a person familiar with the matter. Goldman, which has weathered the storm of the credit crunch better than many competitors, has not had anywhere near the level of job cuts that rival firms, such as Lehman Brothers, have had.
Goldman Sachs was not asked to confirm this report.
Posted by big r , Mar 18, 2008 9:54AM
BSC up 20% this morning. With yesterdays increase of JPM factored in, BSC is worth $98 a share. Employees, who account for 30% of the total shares, are talking about voting against the deal.
Posted by guest , Mar 18, 2008 10:05AM
disagree. BSC can no longer be operated as a going concern without JPM.
standalone BSC is worth zero plus a haircut to bondholders
Posted by guest , Mar 18, 2008 10:07AM
Not sure about your math r, but even with this morning's JPM increase factored in, BSC is worth $2.30...
Posted by guest , Mar 18, 2008 10:08AM
If shareholders vote against the deal, what does yesterday's increase in JPM have to do with what BSC is worth? I suspect you're trying to make a goofy argument that because BSC said their book value was $80 per share and JPM is up about 20% from their Friday close that somehow that increases BSC book value by 20%. Doesn't exactly work that way big r.
Posted by guest , Mar 18, 2008 10:15AM
wow! that sounds like a great deal!!! but since i cannot wait that long and need cash now, big r i am willing to sell you all the BSC you want for $49, let's split the difference
Posted by big r , Mar 18, 2008 10:25AM
i didnt mean BSC could be a stand alone company anymore. simply saying theyre worth more than $2 per share. JPM went up by ~4 yesterday from the addon on BSCs core businesses. at 3.4bn shares outstanding thats an increase of 13.6bn putting the increase of BSC shares at ~98. i know it doesnt work this way realistically and BSC isnt worth that much in sand dollars, but given the numbers you could make an argument its worth more.
also heard that the fed capped the bidding at $2 and that JC Flowers was willing to pay more. but capping it at $2 makes it seems less like a goverment bailout of the industry. but i digress.
Posted by guest , Mar 18, 2008 10:35AM
big r: IF BSC is not a stand alone company, then it is worth AT MOST $0, and it may even be argued that they should pay someone to take the liabilities off their hands.
You contrdict yourself.
Posted by guest , Mar 18, 2008 10:37AM
HAHHAHA JC Flowers what a joke there would be no confidence in a JCFlowers buyout of Bear Stearns, cmon his funding capabilities are worse than Bear's
Posted by 36th Chamber , Mar 18, 2008 10:52AM
I'm still just not understanding how you're getting a 98 for shares of BSC? I think I'm missing something.
Posted by guest , Mar 18, 2008 10:55AM
I think big r stands for retard.
Posted by guest , Mar 18, 2008 10:57AM
lol awww
Posted by guest , Mar 18, 2008 11:09AM
where is kirk kerkorian when you need him
Posted by Investorcluzo , Mar 18, 2008 11:09AM
me thinks big r protests too much. please see wsj article pg. c5. the issue with bear is that their counterparties have no confidence in the financial wherewithal of the bank. do you really think 'effing up this deal is going to change that view? moreover, what do you think would happen if the fed backed a deal by a foreign bank (like HSBC, which appears to be the only other stalking horse with credibility), maybe just a little political fallout? exhibit a, the boeing fiasco...
Posted by Anal_yst , Mar 18, 2008 11:11AM
Big R i was gonna give you the benefit of the doubt that $98 was a joke and hyperbole, butt alas, it was not so. I have no idea where or how you came to that fuzzy calculus, butt its really simple, Price jpm * .05473 (or whatever) = Price bsc, so ~$2.30 as things stand currently.
Posted by guest , Mar 18, 2008 11:11AM
big r is just saying BSC was worth more than $2 and JPM jumped yesterday based on the additonal perceived value. not really sure how $98 gets thrown out there but the basic point is clear.
Posted by guest , Mar 18, 2008 11:48AM
best case scenario, you count in the $6 bbn litigation reserve and you get what, $50? fine, fifty bucks. done. the shareholders are going to sue themselves right out of the rest. ironic.
Posted by guest , Mar 18, 2008 11:53AM
big r is saying that if you think the $4 increase in JPMorgan is entirely due to the value of its Bear Stearns acquisition, then JPMorgan just gained (4 * # of shares oustanding) in market cap and only paid 270 million dollars.
That puts the value of a BSC share at roughly ($4 * # of JPM shares outstanding)/(# of BSC shares outstanding)
The math is obviously ridiculous but he makes a point.
Posted by Novice , Mar 18, 2008 12:03PM
big r is saying that the value of JPM's increase can be calculated as a judgment on the worth of BS, and divided by shares outstanding is $98. It's facile, and it's wrong, but the math is straightforward. JPM's gains are benefits to be derived from the coming sale. BS isn't worth anything without JPM, let alone that much, and any hostage-taking to squeeze a higher offer JPM has been prevented by all those lovely little codicils.
BS alone = valueless. When JP Morgan told Congress that his primary asset was his reputation, he meant this scenario.
Posted by Investorcluzo , Mar 18, 2008 12:12PM
c'mon people, get a clue. as bob pissonme just said, bsc holders are delusional...so jpm was up $4 yesterday (equates to a market cap gain of $13.6 billion for those keeping score at home), that's more than the value of bsc's book value which was $9.7 billion (at the end of last qtr, by the way, that's before write-downs). I could be wrong here, but I'd bet good money that the market wouldn't pay $117 a share for bear today, tomorrow or next month. anyone care to bet/argue?
Posted by guest , Mar 18, 2008 12:24PM
BSC shareholders are seriously delusional. YES, with JPMs massive balance sheet backing the business and fed's $30B investment, the BSC operations DO have some significant value.
However, absent those 2 the business is worthless. Hence the choice was between getting paid nothing and SOMETHING. JPM could have had bid $1, what exactly were BSC's options anyway?
Posted by guest , Mar 18, 2008 12:34PM
hearing all kinds of things. hearing bsc creditors buying up equity to vote the deal through.
Posted by guest , Mar 18, 2008 12:42PM
BSC's options were bankruptcy (get zero and maybe take down the financial system) or take the deal. The fact that a business combination yields more value than a part doesn't mean the part should be paid for the value in the combination. If someone else wanted to step in they definitely had the time to make themselves known. Contrary to BSC's management, trouble rumors have been brewing since the summer and panic mode was in full force last week. That would be the time to reach out and put your name in the hat. If the shareholders want to blame someone, they should look straight at management and the board to which they were accountable.
Posted by guest , Mar 18, 2008 12:44PM
The point and counterpoint are clear. Leave aside the computational minutia. Precise valuation is difficult given the opacity.
Fundamentally, the question is:
Can Bear get a better offer, or likewise, can they use the JPM / Fed guarantee to get back on their feet and get out of being acquired entirely?
I do not have an answer.
Posted by Anal_yst , Mar 18, 2008 1:45PM
@ 12:44
Read the merger agreement, section 6.9 if memory serves correctly. If my understanding of it late last night is correct, its going to be pretty hard for BSC to use the JPM/Fed guarantee to 'get back on its feet', as you put it, but then again, I'm not a legal jockey so I might be missing something...
Posted by guest , Mar 18, 2008 2:02PM
I say vote against the deal, not much of a difference between $2 and $0 at this point and at least if the deal does not get approved we get to see the idiots running BSC squirm while the firm goes into bankruptcy and gets liquidated!
The firm would have been worth more liquidated through bankruptcy than it was sold for, this is a scam orchestrated by the Fed to prevent the inevitable market crash from occuring yesterday.
Posted by guest , Mar 18, 2008 4:35PM
How can you claim that the firm would be worth more? Even at current valuations - there was barely any equity left in the firm. And with leverage in the mid-30's, how on earth would you expect the equity to be not wiped out completely if there was a firesale of assets?
The BSC equity holders were effed - irrespective. The 'intervention' saved the BSC lenders, other firms, other lenders, other equity holders - basically everyone else. At least they are getting some change now, incidentally at tax-payer expense - take away the fed $30B and the place is worth nothing.
Posted by guest , Mar 19, 2008 7:10AM
Chris Flowers would have to sell his stake in Shinsei before touching Bear. Oh well, too late for that...
Posted by guest , Mar 19, 2008 8:19AM
by my math, there is 100% difference between $2 and $0.