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Published on March 19, 2008

First of all, the US$2-a-share fire sale has directly hit 14,000 Bear employees. The stock used to top $200 a share. Today they are worth less than $5.

Employees own about a third of Bear's shares.

Their portfolios have dropped in value by $3 billion (Bt93.6 billion) this month alone and more than $5 billion since the beginning of the year.

"People are pretty stunned," said Ki Byung, who works for a division of Bear Stearns, was quoted by Associated Press as saying, even though he has not worked there long enough to earn a stock bonus.

"People are just trying to get through the day. It's my first job out of school. I thought it was a big company, it would be a good experience. Now after a couple of months, something like this happens."

On top of that, half of Bear's staffers are expected to be laid off as per the takeover plans, Associated Press quoted a JP Morgan source as saying. The lay-offs are anticipated over the next couple months.

On the other hand, JP Morgan has reason to smile. While most financial stocks on Wall Street were under pressure on Monday, JP Morgan Chase gained 10 per cent on news it would buy Bear for $2 a share.

Korn Chatikavanij, the shadow finance minister and Democrat Party deputy secretary-general, is also smiling.

Korn was head of JP Morgan Securities (Thailand) before entering politics four years ago. He is smiling because he still holds some JP Morgan shares.

He told The Nation that four years ago, JP Morgan thought about buying Bear Stearns, but the plan was scrapped.

At the time, Bear's stock traded much, much higher.

In terms of strategic takeovers, Bear Stearns is interesting, because its primary brokerage operation performed as brokers for hedge funds, he said.

However, this was also the prime cause of the current fiasco.

So, Bear's fall was an opportunity for JP Morgan, which is spending only some $200 million to buy it.

View our exclusive interview with Korn on the impact of the US financial turmoil on the Thai market at nationmultimedia.com.

jiwamol@nationgroup.com

The Nation