"It looks to me like Bear Stearns got riddled with bullets''

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We stand by our statement that no one killed Bear and then had a celebratory breakfast at Denny's afterwards but apparently there is a vague chance someone killed Bear, and then went to a safe house to lay low, count his money and plan an attack on Lehman.* Bloomberg reports that on March 11, *someone* bet $1.7 million that BSC would suffer an unprecedented drop within a matter of days. That *someone* was so confident that Bear was going down that he/she/they used put options that gave purchasers the right to sell 5.7 million shares of the firm for $30 each and 165,000 shares for $25 each nine days later, less than half the $62.97 closing price on March 11.
"Even if I were the most bearish man on Earth, I can't imagine buying puts 50 percent below the price with just over a week to expiration,'' Thomas Haugh, general partner of Chicago-based options trading firm PTI Securities & Futures LP told Bloomberg. "It's not even on the page of rational behavior, unless you know something.''


Former Bear CEO Alan Schwartz, who at one time was under the impression that BSC was drowning in liquidity and was understandably flummoxed about rumors to the contrary, told the Senate banking committee on April 3 that there are ``lots of reasons why people could have a financial motivation to induce panic." These reasons include but are not limited to a decade old drug deal with Cayne gone bad and sheer boredom. If you polled a random group of people on your firm-monitored buddy list, I'm sure they'd all have some petty reason to want to take down Bear. But whose was the pettiest?
Let's play SEC and solve this one. Since this is a story based on rumors (not the Bloomberg article specifically but The Bear Story in general) we might as well start circulating a few more. To get the ball rolling, I'll name a few now and then you can add to the list and/or give reason why any named should be removed:
-- Goldman Sachs
-- SAC
-- Charlie Gasparino
-- Tudor
-- Warren Spector
-- Bryan Burrough (THINK ABOUT IT)
All improbable? Probably. And we want more than rumors (that you've probably already heard). We want the truth.
**Note to representatives of any of the firms named above: if you take issue with your inclusion on this SPECULATORY list, save us the quarter and call us to say, "It wasn't me." 212-334-1871 ex. 5 (you have to leave a message so it will get forwarded to my cell). Or, if you are an investor with information, get in touch. Or a counterparty. As we get assurances from reliable sources, we'll cross names off the list.
Bear's Options Action [CNBC]
Bringing Down Bear Began as $1.7 Million of Options [Bloomberg]
*Kidding?

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