Bear Stearns Bought For $2

Last night it was announced that Bear Stearns would be bought out by JP Morgan for only $2 a share. This price Bear Stearns at a market cap of just $236.2 million.

This is significant as Bear Stearns was the fifth largest investment house. How bad Bear Stearns bet on mortgage backed investments will provide a clue into how others like them bet as well.

With Bear Stearns going basically belly up internationally markets stumbled last night, and this morning the NASDAQ is already down over 2.5%, with the S&P 500 down 2.3%. This means both indices are set to open at fresh 52 week lows.