Is Bear Stearns in play?

In the wake of the collapse of two Bear Stearns (NYSE: BSC) hedge funds generating massive losses, some on Wall Street are wondering if the miscue could lead to the sale of the company. According to the New York Times DealBook, "CNBC's Charles Gasparino says it could. He reported Monday that if Bear's stock continues to fall - losing an additional $10 or more - the firm "clearly could be bought by a bigger player," he said." By the way, pick up a copy of Gasparino's Blood on the Street if you haven't already.

But the piece also quotes Portfolio.com's Felix Salmon, who wrote that "A $10 drop from current levels would take the stock all the way down to - oh, where it was back in September."

But my favorite quote of all comes from Bear's CEO James E. Cayne, who dismissed the takeover rumors as "old and repetitive."

Oh, I'm sorry Mr. Cayne: Are we boring you? But I suppose that the takeover rumors are boring, especially when compared with the collapses of the hedge funds that shook market confidence.

Bear Stearns does look cheap compared to the other investment banks, and maybe it will become a takeover target. But even if it doesn't, its low valuation might make it a good alternative for investors to competitors like Goldman Sachs (NYSE: GS).