By Jeremy Vohwinkle with Comments
Last week, the big news was that JPMorgan Chase was going to buy once multi-billion dollar rival Bear Stearns for around $2 per share, valuing the company even less than the value of their corporate headquarters building. Oddly enough, even after this announcement was made, the stock was still trading at a premium.
While the stock was hit hard on Monday following the news and trading under $4 per share, it was still a bit of a mystery as to why there were so many people buying the stock. Even on CNBC, the analysts seemed a bit dumbfounded as the stock continued to rise to $8 on Tuesday. After a few volatile trading sessions, the stock settled in around $6 as angry shareholders continued to protest the low JPM bid. For once, it looks like shareholders made their voices heard as JPMorgan agreed to increase its offer to $10 per share and bear the first $1 billion in losses on Bear Stearns assets.
Who wishes they had picked up a few BSC shares on Monday for around $4?
Home Sales Increase, Prices Drop
After six straight months of declines, the National Association of Realtors reports that average existing home sales rose 2.9% in February. This comes as quite a shock since most analysts expected a further decline for February. While that number is a good indication that more people are buying homes, the actual average sale price is still declining. The median home price compared to this time last year is still down a little over 8%. Still bad news for hoping that your home is increasing in value, but the increased supply is great for buyers.
Of course, any good news is welcome news in the housing sector, so hopefully it is a sign that things may begin to stabilize this year. I’m not terribly optimistic yet, but I’ll take any news that isn’t a sign of a continued downward spiral. With home prices still nearly 25% lower than they were on average a year ago, I think we still have a little ways to go. But as things do begin to settle down, the once again increased demand should slowly turn things around.
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Filed Under: Economy