The Bear Stearns Companies Inc. is the parent company of Bear, Stearns & Co. Inc., a leading global investment banking, securities trading and brokerage firm.
Based in New York City, it was one of the largest global investment banks and securities trading and brokerage firms prior to its collapse in 2008. The main business areas, based on 2006 net revenue distributions, were: capital markets (equities, fixed income, investment banking; just under 80 percent), wealth management (under 10 percent) and global clearing services (12 percent).
Bear Stearns was founded as an equity trading house in 1923 by Joseph Bear, Robert Stearns, and Harold Mayer with 500,000 U.S. dollars in capital. The firm survived the stock market crash of 1929 without laying off any employees and by 1933 opened its first branch office in Chicago.
In 1955, the firm opened its first international office in Amsterdam. In 1985, Bear Stearns became a publicly traded company. It served corporations, institutions, governments and individuals.
Through Bear Stearns Securities Corp., it offered global clearing services to broker dealers, prime broker clients, and other professional traders, including securities lending.
Bear Stearns was also known for one of the most widely read market intelligence pieces on the street, known as the "Early Look at the Market - Bear Stearns Morning View."
In 2005-2007, Bear Stearns was recognized as the "Most Admired" securities firm in Fortune's "America's Most Admired Companies" survey, and second overall in the security firm section. The annual survey is a prestigious ranking of employee talent, quality of management and business innovation. This was the second time in three years that Bear Stearns had achieved this "top" distinction.
Beginning in 2007, the company was badly damaged by the subprime mortgage crisis.
On March 14 2008, JPMorgan Chase, in conjunction with the Federal Reserve Bank of New York, provided a 28-day emergency loan to Bear Stearns in order to prevent the potential market crash that would result from Bear Stearns becoming insolvent.
On March 17, 2008, JP Morgan Chase offered to acquire Bear Stearns at a price of 236 million dollars, or 2 dollars per share.
On March 24, 2008, that offer was raised to 1.1 billion dollars or 10 dollars per share in an effort to pacify angry shareholders. JPMorgan Chase completed its acquisition of Bear Stearns on May 30, 2008 at the renegotiated price of 10 dollars per share.
(Agencies October 14, 2008)