No Respite for Bear Stearns

On Friday, I noted that Bear Stearns was trading below its book value ($84.09 per share), and said that the "next milestone to fall" would take place if the share price dropped past $73.41, where the bank has a market capitalization of $10 billion.

Well, guess what – it’s done that today. The shares are now at $72.47, down 5% on the day despite opening strongly on news of a new CEO.

At just 86% of book value, Bear’s now looking decidedly cheap – which doesn’t mean, of course, that it can’t fall much further. Just take a look at Countrywide, down 20% today to $6.06, which puts it on a price-to-book ratio of just 0.29.

Part of the problem might well be that Cayne will continue on as chairman, and therefore be able to block any takeover attempt. Maybe he should resign from that job, too.

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