Bear Stearns Shares Tank On Deal

NEW YORK (AP) — Bear Stearns shares were down more than 85 percent Monday after the deal announced Monday night to sell the investment house for $2 a share to JPMorgan Chase.

Even with the huge decline, Bear Stearns has been trading at about $4 a share, as investors worry about how far the credit crisis could spread

JPMorgan announced Sunday night that it would acquire Bear Stearns for $236.2 million in a deal that was fast-tracked by the federal government to avoid a bankruptcy. The price represents roughly one percent of what the investment bank was worth just 16 days ago.

The Federal Reserve and the U.S. government swiftly approved the all-stock buyout to complete the deal before world markets opened. The Fed said it would guarantee up to $30 billion of the troubled mortgage and other assets that got the nation’s fifth-largest investment bank into trouble.

JPMorgan Chase shares were up more than ten percent at midday.