A Billion-Dollar Loss For Lewis (yes, a Bear Stearns investor)

[babylonsister]

http://www.forbes.com/business/2008/03/17/bear-lewis-cayne-biz-billies-cx_af_0317bankbillies.html

A Billion-Dollar Loss For Lewis
Andrew Farrell, 03.17.08, 12:48 PM ET



When billionaire Joseph Lewis started buying into Bear Stearns last year, most thought he was bottom feeding. It turns out that Lewis was getting in near the top.

Bear Stearns (nyse: BSC - news - people ) sold itself Sunday to JPMorgan Chase (nyse: JPM - news - people ) for $2 per share. Twelve months ago, those shares traded for $150 each. The company sold at a fire-sale price this weekend after customers rapidly withdrew assets and put it on the brink of collapse. (See: " Bear Throws In The Towel").

Lewis holds 11.1 million shares of Bear Stearns. He paid about $1.2 billion for the stake. Its value is now $22.2 million. Prior to the Bear Stearns meltdown, Forbes estimated Lewis is the world's 368th-wealthiest person, with a fortune of $3 billion. (See: " Billionaire Lewis Bullish On Bear").

The flop of Bear Stearns stock also leaves company executives hurting. The brokerage's chairman, Jimmy Cayne, owns 5.6 million shares. At its 52-week high, the stake was worth nearly $900 million. At the sale price to JPMorgan, it's worth around $11 million.

Cayne must also deal with a fresh round of criticism from investors. He stepped down as chief executive in January after drawing flak that he was frequently absent as Bear Stearns tried to navigate through its mortgage crisis. The Wall Street Journal reports that Cayne was in Detroit playing in a bridge tournament last week as his company struggled to stay afloat.

The problems behind Bear Stearns' meltdown aren't isolated. Nor is the pain. Saudi billionaire Prince Alwaleed Bin Talal Alsaud could be suffering most of all. He owns a massive stake in Citigroup (nyse: C - news - people ). The value of his shares in the banking giant fell by nearly $6 billion over the past year.

[bicentennial_baby]

1. Did you hear what Lewis said today?

The the JPM deal was "a derisory offer and I don't think they will get it" Waaaaaaaah!

[babylonsister]

3. Aww, he's cryin' in his gold-plated tea cup. Good thing there's

more money where that came from, but it doesn't bode too well for his reputation. "You lost HOW MUCH?" :wow::D

[lumberjack_jeff]

2. .

[LSparkle]

4. Glad at least ONE Saudi is feeling the pain ...

As I pay $3.61 a gallon at the pump, I have no sympathy for him (or his compatriots) whatsoever.

[Rex]

5. From 1.2 billion to 22.2 million in a year.

But hey, no probs with the economy! George said so! Said they were gonna smoke out the bad guys and return good dividends to the holders. Series.

[Mountainman]

6. Personally I don't have any empathy for these folks. My mind tells me that they are players in the

cause and now they reap the effect. Their problem was in not seeing the collapse soon enough to get out. This wealth was made by investing transactions that took money from little people via loans and bundled it and sold it. Now those loans are worthless so the bundles are also worthless.

[catnhatnh]

7. One more bet like that....

...and the fucker will learn what it looks like to check the price of a gallon of gas or a gallon of milk every day-welcome to my world asswipe.

[acmavm]

8. Ah, how pitiful. A rich guy feeling the bush** touch like the rest of

us. Now all we gotta do is get some of his relatives in Iraq and Afganistan and he'll know how the average American really feels.

[Clear Blue Sky]

9. Big fall.

It was $50 per share a week or so ago. Lots of people lost their shirts.

The executives who created this mess get their bonuses and they are safe. It's the middle management with Bear Stearns stock in their 401Ks that really get screwed.

[babylonsister]

10. Not to mention half the BS workforce, 7,000 people, are being laid off.

Bad day all around. And welcome to DU!

[Rex]

12. But ain't that how it always goes? Those that are the backbone of a company

get screwed over and those that were the 'brains' of the company move on to other jobs. They just move right into another over paid job or retire with a nice package deal to treat them right on cold nights.

Welcome to DU.

[sarcasmo]

11. Cry me a river, you rich greedy A$$HAT.

Company executives are hurting too, pity, pity.

[elehhhhna]

13. DUh. First rule of investing big $: DIVERSIFY!