Bear Stearns CEO sells entire holding. What would you do?

Posted Mar 28th 2008 2:07PM by Aaron Katsman
Filed under: Deals, Bad News, Management, Scandals, Bear Stearns Cos (BSC)

With news that Bear Stearns (NYSE: BSC) CEO James Cayne has sold all of his holdings in the stock for $61 million, I actually feel sorry for him. Usually when a senior member of management sells stock it's cause for worry, but in this case, what would you have done?

According to the AP report: " Cayne sold 5.66 million shares for exactly $10.84 a share on March 25, according to a filing with the Securities and Exchange Commission. His stake was once valued at about $1 billion when the stock was trading at $171.50 per share."

With all due respect, the man has invested the last 15 years of his life in the company, and to go from being a billionaire, to someone with tens of millions of dollars overnight is a sad story. Now I know you are all going to comment that he still has $60 million, and it was his fault that the bank came crashing to the ground, but that kind of fall must be hard.

If I was in his position I would have sold everything as well. He needs to protect whatever he has, and if he can walk away with a small fortune, then all the more power to him.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 3/28/08

Tags: Bear Stearns, BearStearns, billionaires, millionaires

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Reader Comments (Page 1 of 1)

3-28-2008 @ 3:00PM

vangogh said...

A CEO of a company selling off all his holdings in the company while his employees are taking a beating is the same as a Captain on a ship taking a lifeboat for himself and letting the crew fend for themselves. Now this article wants the reader to have pity on the CEO because he's going to have to live on 60 million dollars. Poor man. What's apparent here is that the CEO as most CEO's today was out of touch with the company and its management. The employees will have to find other positions with JP Morgan Chase analyzing how much existing staff will be needed. I doubt the upper management will have trouble finding new positions with other investment firms only to screw them up as well. Please allow me to bow my head in sympathy for the leader of a Corporation who believed his only purpose was building a personal portfolio instead of being a "LEADER" as is defined in dictionary's and even business books. When you're the Leader, you don't abandon your post and leave your subordinates to take the heat for your boggling decisions. I should feel sorry that this CEO is not a billionaire anymore, only a millionaire. Forgive the cynicism, but try telling the employees to have compassion for the man that put them out of work.

3-28-2008 @ 4:01PM

Paul said...

You're right; it's tough that Cayne's poor management has resulted in his Bear Stearns holdings amounting to only $61 million. However, it seems like his selling his entire holdings in the company is akin to the captain of a disabled battleship beating the ship's crew to the lifeboat!

3-28-2008 @ 3:57PM

Alvin White said...

It seems Mr. Katsman has a soft heart for the Bear Stearns CEO. I bet he thinks Rudy Giuliani would make a great governor.
I say bring back Eliot Spitzer as a special prosecutor just for the hoodlums and thugs that are on Wall Street.

And you people talk about Black Criminals.

4-02-2008 @ 11:08PM

Paul said...

"if he can walk away with a small fortune, then all the more power to him."

That pretty much says it all, eh? That's what it's all about. Privatize the profits, socialize the loses. Go free market!