Subprime mortgages left the American economy in shambles in 2007.  Bear Stearns was investment group guilty of subprime lending and subsequently was facing a subprime mortgage hedge fund crisis.  Bear Sterns was losing money by the billions and it was feared that the company would have to start liquidating its collateralized debt obligation.  The instability of Bear Stearns, and other investment banks, caused panic throughout the world’s financial markets.  In an effort to prevent further chaos, JP Morgan Chase stepped in to acquire the failing Bear Stearns in 2008.

On this day, March 17th, in 2008, JPMorgan Chase acquired Bear Stearns for a $270 million.  The buying price translated into a stock swap worth a mere $2 per share, which was less than 7% of Bear Stearns value when the markets closed the previous Friday. The agreement was hastily put together by JP Morgan during the weekend to be completed before Asian markets reopened.

On March 24, a class action suit was filed by Bear Stearns shareholders that challenged JPMorgan’s low share price.  A revised deal was created, which offered $10 a share or a total buyout of $1.2 billion.  After several weeks of negotiations, the sale of Bear Stearns was approved by its shareholders for the $10 per share price.