Executives at Bear Stearns are addressing the news of the firm's need for capital, provided by the Federal Reserve through J.P. Morgan Chase. Shares have plunged today and the company has shifted its earnings report, previously scheduled for Thursday, to Monday.
12:30 P.M. ET: While the bulk of the investment community is listening to classical music in anticipation of the call's beginning, here's an update of where the world stands. Bear Stearns shares are down 36.7% on more than 100 million shares traded, making it easily the most actively traded stock on the Big Board today. The options market shows a ballooning in interest in put options at the $20 strike price - more than 29,000 contracts have traded, and headed into today there was no open interest at this strike.
12:37 p.m.: Finally, the call is beginning. Elizabeth Ventura of Bear's corporate communications department is starting the call with the usual boilerplate about forward-looking statements.
12:38 p.m.: Sam Molinaro, CFO notes that the firm is moving up its earnings relase to Monday, and also to share some information on the shared loan facility.
12:39 p.m.: Mr. Molinaro turns it over to Alan Schwartz, CEO, who immediately sets about blaming rumors. "Bear Stearns has been subject to a significant amount of rumor and innuendo over the past week. We attempted to try to provide some facts to the situation but in the market environment we're in, the rumors intensified and given the nervousness in the market a lot of people it seemed wanted to act to protect themselves from the possibility of rumors being true and didn't want to wait to see the facts." MarketBeat is having a hard time remembering what "facts" the firm put out other than to say the rumors weren't true.
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As Bear's price declined, short interest increased sharply, as measured by market cap on loan. (Source: Data Explorers Ltd.)
12:41 p.m.: "Through the early part of the week we had good liquidity but the "concerns on the part of our counterparties, our customers and our lenders got to the point where a lot of people wanted to get cash out," Mr. Schwartz says.