Last week, we saw two catastrophic train wrecks of Shakespearean proportions play out in New York.
I’ll say less about the Eliot Spitzer saga because it’s more cut and dry. There’s little I can add to that discussion other than to shake my head in disbelief at the things men are willing to risk for gratification.
I have more to say about the sudden and swift implosion of Bear Stearns, a company which I know well. Bear Stearns was where I had my first “real job” – the summer between freshman and sophomore year at Harvard, I was a Financial Analyst in Bear’s media and entertainment investment banking group. At the time, Alan Schwartz (now Bear’s CEO, and the guy captaining the rapidly sinking ship) was a top investment banker in our group, which was full of very fine people. The media group back then did a lot of top deals, including advising Disney on their purchase of CapitalCities/ABC (a deal I worked on) which was the seminal media deal of that year and formed the basis for the Disney conglomerate that we all see today. We can thank Bear Stearns for putting together the deal that now has us drowning in corporate synergies like the endless promotions of Disneyland on ABC’s “Extreme Makeover Home Edition” and “Dancing with the Stars”.
Bear always had a very special culture – rough and tumble, scrappy, frugal, client-focused. Bear’s bankers always worked harder than anyone else on the Street. It was de rigeur to work from 8am until 6pm – the NEXT day – without sleep. After all, the top dogs at Goldman Sachs and Morgan Stanley had their elite reputations on which to rest their laurels; Bear had to re-earn their bonafides evey day. It was the Avis (“we try harder”) of the investment banking business. It was the little engine that could. And they kicked serious ass.
Today is a sad day for me and for Wall Street. It’s shocking to me that the equity value of Bear Stearns could somehow be worth a mere $270M, less than Zillow (huh!?). And in the ultimate Shakespearean twist, bare-knuckled Bear Stearns ends up being bought by the most genteel, white-shoe, storied, WASPy firm out there: JP Morgan. Rest in peace Bear Stearns – you had a great run and I’m sorry to see you go. You join extraordinary (and equally scrappy) firms like Drexel Burnham Lambert, Kidder Peabody, and Donaldson Lufkin Jenrette (DLJ) in the graveyard of hallowed Wall Street investment banks.