Thursday, March 20, 2008

When Vultures Don't Wait for Carrion

From DealJournal:

In the days leading up to the collapse of Bear Stearns the options market exploded, with massive bets on disaster that seemed outlandish, but ultimately have proved profitable as large hedge funds bet on the stock tanking (which it did).

The Securities Exchange Commission is looking into whether market rumors contributed to the downfall of the firm, as panicked investors pulled funds and lenders cut off credit to the Wall Street investment bank, leaving it to be snapped up at $2 a share by J.P. Morgan Chase.

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